Low inventory levels and late deliveries, especially of its `2for' items, dragged down profits at Children's Place Retail Stores Inc, which on Thursday posted a massive drop in third quarter net earnings to $6.6 million, from $27.6 million in the year-ago period.

"We have learned from our recent experiences and with our strategies clearly defined, our efforts now center on implementation," chairman and chief executive officer Ezra Dabah said in a press release. He added that this will involve improving product quality and the introduction of a new pricing strategy.

Net sales for the period dropped 4 per cent to $173.4 million, compared with $181.4 million for the third quarter of 2001. Comparable store sales decreased 21 per cent in the quarter, versus a 9 per cent decrease for the same period last year.

For the nine-month period net earnings were $6.6 million, compared to $27.6 million a year ago. Net sales increased 4 per cent to $474.7 million, from $458.2 million, and comparable store sales fell 15 per cent for the period.

Separately, the company announced that its current fiscal 2003 store expansion plan is to open approximately 50 stores.