Kids' clothing chain Children's Place Retail Stores Inc on Thursday posted a steep fall in first quarter profit as unseasonal weather and war worries hit sales.

The New Jersey-based operator of more than 660 stores posted earnings of $5.5 million, or 21 cents per share, compared with $15.2m, or 56 cents per share, in the year-ago period.

Sales rose five per cent to $181m from $173m but same-store sales plunged 13 per cent.

Chairman and CEO, Ezra Dabah, said: "Although our financial results are clearly not at the level we would like to see, we are pleased with the progress we have made in the first quarter. We are encouraged that comparable store sales trended significantly better as the quarter developed.

"Our strategic initiatives are on track and yielding positive results - customer conversion rates are on the rise, units per transaction are increasing and most importantly, the number of comparable store transactions increased nine per cent in the combined March and April Easter selling season.

"While encouraged by our early signs of improvement, we remain cautious in our overall business outlook."