Children's Place profit up

(Reuters) - Children's Place Retail Stores Inc's (PLCE.O) quarterly profit almost doubled, driven by higher sales and improved gross margins, but the apparel retailer said it expects a challenging holiday season.

"We expect this holiday season to be a very challenging one as the macroeconomic environment remains weak and is impacting consumers' purchasing power," Chuck Crovitz, Interim chief executive said in a statement.

Many apparel retailers, including Christopher & Banks (CBK.N) and Charming Shoppes (CHRS.O), are bracing for a grim holiday season as the ongoing downturn in the U.S. economy forces more and more buyers to stop short of spending on non-essentials.

On Wednesday, children's clothing retailer Gymboree Corp (GYMB.O) forecast the upcoming holiday season and following year to be "more challenging" given an expected pullback in consumer spending.

For the third quarter ended November 1, Children's Place posted net income of $24.1 million, or 81 cents a share. It earned $12.3 million, or 42 cents a share, a year earlier.

Adjusted earnings from continuing operations was 84 cents a share, in line with the analysts' average estimate, according to Reuters Estimates.

Net sales at the company, which operates about 920 Children's Place stores, rose about 5 percent to $450.6 million.

Same-store sales, a key gauge of retail performance that measures sales at stores open at least a year, were up 2 percent.

Gross margin rose to 43.6 percent from 40 percent. Selling, general and administrative expenses were down 3 percent during the quarter.

Shares of the Secaucus, New Jersey-based company closed at $17.55 Wednesday on Nasdaq.

(Reporting by Dilipp S. Nag in Bangalore; Editing by Pratish Narayanan)