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Children's Place

(PLCE) - Get Children's Place, Inc. Report

shares were down sharply after the company said earnings will fall short of analysts' expectations in the second half amid declining sales.

Shares of the Secaucus, N.J.-based company were down $5.10, or 31.6%, at $11.04 in premarket trading.

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The children's apparel retailer expects break-even third-quarter results. Earnings in the fourth quarter will be "only slightly positive" if third-quarter trends continue, the company said. Analysts on average had expected earnings of 57 cents a share in the third quarter and 72 cents in the fourth quarter, according to Thomson/First Call.

Sales at stores open at least a year have fallen 30% for the month to date, and 22% so far in the quarter, the company said.

"While our latest fall line had initial positive customer response, sales fell off dramatically in September," Chief Executive Ezra Dabah said in a statement. Dabah cited overdesign of the merchandise, among other problems. Unseasonably warm weather, continued declines in mall traffic and the sluggish economy also hurt sales, the CEO said.