Children's merchandise retailer The Children's Place Retail Stores Inc says that expenses incurred as it incorporated Disney Store locations have offset revenue growth, causing an 85 per cent bigger second-quarter loss.

Second-quarter net sales increased 68 per cent to $318.7 million from $189.2m last year, with a 4 per cent same-store sales growth compared to last year's 10 per cent increase.

Net loss for the quarter totalled $18.3m compared with a net loss of $9.9m a year ago.

"Our second-quarter financial results reflect improved performance at The Children's Place and better than expected operating results at Disney Store," said Ezra Dabah, chairman and chief executive officer.

The company has revised its full year 2005 earnings outlook from $2.15-$2.25 per share to $2.20-$2.30 per share.