The Children’s Place, Inc. (Nasdaq: PLCE), an
omni-channel children’s specialty portfolio of brands, today
announced financial results for the second quarter ended August 3,
2024.
Muhammad Umair, President and Interim Chief Executive Officer
said, “During the second quarter we proactively made certain
strategic and operational changes to improve the profitability of
the business and provide a foundation for future growth and we were
pleased with the results. While we anticipated that these efforts
would provide pressure to topline sales, we drove significant
improvements in gross profit margin versus the prior year’s second
quarter and sequential improvement in margin for two quarters,
which is particularly important moving from the first quarter to
the second quarter. In addition, we were also able to significantly
decrease Adjusted SG&A expenses as we reduced payroll costs and
eliminated unprofitable marketing spend, all of which has combined
to show more than a $39 million improvement in Adjusted operating
income despite the lower top line sales. While these first steps to
improve operating results have been promising, we still believe
that we have significant work ahead of us in future quarters as we
rationalize profitability.”
Second Quarter 2024 ResultsNet sales decreased
$25.9 million, or 7.5%, to $319.7 million in the three months
ended August 3, 2024, compared to $345.6 million in the three
months ended July 29, 2023. The decrease in net sales was primarily
driven by an anticipated decrease in ecommerce revenue, as the
Company proactively rationalized its unprofitable promotional
strategies, inflated marketing spend and “free shipping” offers to
significantly improve profitability, which was successful during
the second quarter. These efforts not only improved the
profitability of the Company’s ecommerce business, despite the
lower revenue, but also benefited the brick-and-mortar channel, as
the stores business experienced positive comparable store sales for
the first time in ten quarters. The wholesale business also
rebounded with double-digit growth after a decline in the first
quarter.
Comparable retail sales decreased 7.2% for the quarter, largely
driven by the planned decrease in ecommerce as this business
decreased by a double-digit percentage as the Company proactively
sacrificed unprofitable sales to improve profitability. Stores
experienced a positive comparable store sales result for the first
time since the post COVID-19 period of 2021, driven by stronger
units per transaction and conversion metrics, and improving traffic
trends.
Gross profit increased $24.0 million to $111.8 million in the
three months ended August 3, 2024, compared to $87.8 million in the
three months ended July 29, 2023. The gross margin rate increased
by 960 basis points to 35.0% during the three months ended August
3, 2024, compared to 25.4% in the prior year period. The increase
was caused by a combination of factors, including reductions in
product input costs, including cotton and supply chain costs, which
negatively impacted margins in the prior year. These improvements
were combined with the success of the Company’s rationalization of
profit-draining promotional strategies and shipping offers, which
resulted in a significant improvement in the leverage of ecommerce
freight costs due to the Company’s new shipping threshold for free
shipping.
Selling, general, and administrative expenses were well
controlled at $96.1 million in the three months ended August 3,
2024, compared to $112.0 million in the three months ended July 29,
2023. Adjusted selling, general & administrative expenses were
$88.3 million in the three months ended August 3, 2024, compared to
$101.7 million in the comparable period last year, and leveraged
180 basis points to 27.6% of net sales, primarily as a result of
significant reductions in store payroll and home office payroll,
and the elimination of inflated and unprofitable marketing costs.
This represents the lowest level of Adjusted selling, general, and
administrative expenses in over 15 years for the second
quarter.
Operating loss was $(21.8) million in the three months ended
August 3, 2024, compared to $(36.9) million in the three months
ended July 29, 2023. Operating loss was impacted by incremental
expenses of $36.0 million, which included an impairment charge
of $28.0 million on the Gymboree tradename,
primarily due to reductions in Gymboree sales forecasts and a
reduction in the royalty rate used to value the tradename, and
restructuring costs of $6.1 million due to recent changes in the
senior leadership team. These charges have been classified as
non-GAAP adjustments, leading to a shift back to profitability with
an adjusted operating income of $14.2 million in the three months
ended August 3, 2024, or an improvement of $39.2 million compared
to an adjusted operating loss of $(25.0) million in the comparable
period last year, and leveraged 1,170 basis points to 4.5% of net
sales.
Net interest expense was $9.2 million in the three months ended
August 3, 2024, compared to $7.6 million in the three months ended
July 29, 2023. The increase in interest expense was primarily
driven by higher average interest rates associated with the
Company’s revolving credit facility due to the impact of
refinancings and continued market-based rate increases, partially
offset by continued benefits associated with certain non-interest
bearing loans from the Company’s majority shareholder, Mithaq
Capital SPC (“Mithaq”).
As previously announced, in the three months ended February 3,
2024, the Company established a valuation allowance against its net
deferred tax assets and, as such, continues to adjust the allowance
based upon the ongoing operating results. The provision for income
taxes, which is reflected net of these adjustments, was $1.1
million in the three months ended August 3, 2024, compared to a
benefit for income taxes of $(9.2) million during the three months
ended July 29, 2023. The change in the provision (benefit) for
income taxes was primarily driven by the establishment of the
valuation allowance against the Company’s net deferred tax
assets.
Net loss, which included certain non-cash impairment charges and
non-operating restructuring charges, was $(32.1) million, or
$(2.51) per diluted share, in the three months ended August 3,
2024, compared to $(35.4) million, or $(2.82) per diluted share, in
the three months ended July 29, 2023. Adjusted net income shifted
back to profitability after two years of losses during the second
quarter, improving by $30.4 million versus the prior year to $3.9
million, or $0.30 per diluted share, compared to an adjusted net
loss of $(26.5) million, or $(2.12) per diluted share, in the
comparable period last year.
Fiscal Year-To-Date 2024 ResultsNet sales
decreased $79.7 million, or 11.9%, to $587.5 million in the six
months ended August 3, 2024, compared to $667.2 million in the six
months ended July 29, 2023. The decrease in net sales was primarily
due to reductions in retail sales due to lower store count, and
anticipated declines in ecommerce demand due to the rationalization
of promotions, reductions in inflated and unprofitable marketing
spend and the strategic decision to change “free shipping” offers,
as the Company proactively sacrificed unprofitable sales in an
effort to improve profitability. Comparable retail sales decreased
9.4% for the six months ended August 3, 2024.
Gross profit increased $20.3 million to $204.5 million in the
six months ended August 3, 2024, compared to $184.2 million in the
six months ended July 29, 2023. The gross margin rate increased by
720 basis points to 34.8% during the six months ended August 3,
2024 compared to 27.6% in the prior year period. The increase was
primarily due to reductions in product input costs, including
cotton and supply chain costs, which negatively impacted margins in
the prior year. These improvements were combined with the success
of the Company’s rationalization of profit-draining promotional
strategies and shipping offers, which resulted in a significant
improvement in the leverage of ecommerce freight costs due to the
Company’s new shipping threshold for free shipping.
Selling, general, and administrative expenses were $205.2
million in the six months ended August 3, 2024, compared to $224.9
million in the six months ended July 29, 2023. Adjusted selling,
general & administrative expenses were $177.0 million in the
six months ended August 3, 2024, compared to $210.8 million in the
comparable period last year, and leveraged 150 basis points to
30.1% of net sales, primarily as a result of significant reductions
in store payroll and home office payroll, and the elimination of
inflated and unprofitable marketing costs. This represents the
lowest level of Adjusted selling, general and administrative
expenses in over 15 years for the first two quarters of a fiscal
year.
Operating loss was $(49.8) million in the six months ended
August 3, 2024, compared to $(67.0) million in the six months ended
July 29, 2023. Operating loss was impacted by incremental expenses
of $58.9 million, which included an impairment charge
of $28.0 million on the Gymboree tradename,
primarily due to reductions in Gymboree sales forecasts and a
reduction in the royalty rate used to value the tradename,
restructuring costs of $6.4 million primarily due to recent changes
in the senior leadership team, and several charges due to the
Company’s recent change of control, due to the investment in the
Company by Mithaq, and several new financing initiatives, which
include $10.8 million of non-cash equity compensation
charges and $3.8 million in other fees associated with
the change of control, and $6.7 million of
financing-related charges. These charges have been classified as
non-GAAP adjustments leading to a shift back to profitability with
an adjusted operating income of $9.2 million for year-to-date 2024,
or an improvement of $58.7 million compared to an adjusted
operating loss of $(49.5) million in the comparable period last
year, and leveraged 900 basis points to 1.6% of net sales.
Net interest expense was $17.0 million in the six months ended
August 3, 2024, compared to $13.5 million in the six months ended
July 29, 2023. The increase in interest expense was primarily
driven by higher average interest rates associated with the
Company’s revolving credit facility due to the impact of
refinancings and continued market-based rate increases, partially
offset by continued benefits associated with certain non-interest
bearing loans from Mithaq.
The provision for income taxes was $3.2 million in the six
months ended August 3, 2024, compared to a benefit for income taxes
of $(16.4) million during the six months ended July 29, 2023. The
change in the provision (benefit) for income taxes was primarily
driven by the establishment of a valuation allowance against the
Company’s net deferred tax assets in the Company’s fiscal year for
2023.
Net loss, which included certain non-cash impairment charges and
non-operating restructuring charges, was $(69.9) million, or
$(5.50) per diluted share, in the six months ended August 3, 2024,
compared to $(64.2) million, or $(5.16) per diluted share, in the
six months ended July 29, 2023. Adjusted net loss, which was driven
by losses in the first quarter and partially offset by profits in
the second quarter, was $(11.0) million, or $(0.87) per diluted
share, compared to $(51.2) million, or $(4.12) per diluted share,
in the comparable period last year.
Store Update The Company closed 3
stores in the three months ended August 3, 2024 and ended
the quarter with 515 stores and square footage of 2.5 million.
Balance Sheet and Cash FlowAs of August 3,
2024, the Company had $9.6 million of cash and cash equivalents and
$316.7 million outstanding on its revolving credit facility.
Additionally, the Company used $194.7 million in operating cash
flows in the six months ended August 3, 2024.
Inventories were $520.6 million as of August 3, 2024, compared
to $537.0 million as of July 29, 2023.
Non-GAAP ReconciliationThe Company’s results
are reported in this press release on a GAAP and as adjusted,
non-GAAP basis. Adjusted net income (loss), adjusted net income
(loss) per diluted share, adjusted gross profit, adjusted selling,
general, and administrative expenses, adjusted operating income
(loss) and adjusted EBITDA are non-GAAP measures, and are not
intended to replace GAAP financial information, and may be
different from non-GAAP measures reported by other companies. The
Company believes the income and expense items excluded as non-GAAP
adjustments are not reflective of the performance of its core
business, and that providing this supplemental disclosure to
investors will facilitate comparisons of the past and present
performance of its core business.
Please refer to the “Reconciliation of Non-GAAP Financial
Information to GAAP” later in this press release, which sets forth
the non-GAAP operating adjustments for the 13-week periods and
26-week periods ended August 3, 2024, and July 29, 2023.
About The Children’s PlaceThe Children’s Place
is an omni-channel children’s specialty portfolio of brands. Its
global retail and wholesale network includes two digital
storefronts, more than 500 stores in North America, wholesale
marketplaces and distribution in 15 countries through five
international franchise partners. The Children’s Place designs,
contracts to manufacture, and sells fashionable, high-quality
apparel, accessories and footwear predominantly at value prices,
primarily under its proprietary brands: “The Children’s Place”,
“Gymboree”, “Sugar & Jade”, and “PJ Place”. For more
information, visit: www.childrensplace.com and www.gymboree.com, as
well as the Company’s social media channels on Instagram, Facebook,
X, formerly known as Twitter, YouTube and Pinterest.
Forward-Looking StatementsThis press release
contains or may contain forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, including but not limited to statements
relating to the Company’s strategic initiatives and results of
operations, including adjusted net income (loss) per diluted share.
Forward-looking statements typically are identified by use of terms
such as “may,” “will,” “should,” “plan,” “project,” “expect,”
“anticipate,” “estimate” and similar words, although some
forward-looking statements are expressed differently. These
forward-looking statements are based upon the Company’s current
expectations and assumptions and are subject to various risks and
uncertainties that could cause actual results and performance to
differ materially. Some of these risks and uncertainties are
described in the Company’s filings with the Securities and Exchange
Commission, including in the “Risk Factors” section of its annual
report on Form 10-K for the fiscal year ended February 3, 2024.
Included among the risks and uncertainties that could cause actual
results and performance to differ materially are the risk that the
Company will be unable to achieve operating results at levels
sufficient to fund and/or finance the Company’s current level of
operations and repayment of indebtedness, the risk that the Company
will be unsuccessful in gauging fashion trends and changing
consumer preferences, the risks resulting from the highly
competitive nature of the Company’s business and its dependence on
consumer spending patterns, which may be affected by changes in
economic conditions (including inflation), the risk that changes in
the Company’s plans and strategies with respect to pricing, capital
allocation, capital structure, investor communications and/or
operations may have a negative effect on the Company’s business,
the risk that the Company’s strategic initiatives to increase sales
and margin, improve operational efficiencies, enhance operating
controls, decentralize operational authority and reshape the
Company’s culture are delayed or do not result in anticipated
improvements, the risk of delays, interruptions, disruptions and
higher costs in the Company’s global supply chain, including
resulting from disease outbreaks, foreign sources of supply in less
developed countries, more politically unstable countries, or
countries where vendors fail to comply with industry standards or
ethical business practices, including the use of forced, indentured
or child labor, the risk that the cost of raw materials or energy
prices will increase beyond current expectations or that the
Company is unable to offset cost increases through value
engineering or price increases, various types of litigation,
including class action litigations brought under securities,
consumer protection, employment, and privacy and information
security laws and regulations, the imposition of regulations
affecting the importation of foreign-produced merchandise,
including duties and tariffs, risks related to the existence of a
controlling shareholder, and the uncertainty of weather patterns.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date they
were made. The Company undertakes no obligation to release publicly
any revisions to these forward-looking statements that may be made
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Contact: Investor Relations (201) 558-2400
ext. 14500
|
|
|
|
THE CHILDREN’S PLACE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share
amounts)(Unaudited) |
|
|
|
|
|
Second Quarter Ended |
|
Year-to-Date Ended |
|
August 3,2024 |
|
July 29,2023 |
|
August 3,2024 |
|
July 29,2023 |
|
|
|
|
|
|
|
|
Net sales |
$ |
319,655 |
|
|
$ |
345,599 |
|
|
$ |
587,533 |
|
|
$ |
667,239 |
|
Cost of sales |
|
207,861 |
|
|
|
257,840 |
|
|
|
382,998 |
|
|
|
483,019 |
|
Gross profit |
|
111,794 |
|
|
|
87,759 |
|
|
|
204,535 |
|
|
|
184,220 |
|
Selling, general and
administrative expenses |
|
96,065 |
|
|
|
111,965 |
|
|
|
205,159 |
|
|
|
224,895 |
|
Depreciation and
amortization |
|
9,505 |
|
|
|
11,953 |
|
|
|
21,140 |
|
|
|
23,801 |
|
Asset impairment charges |
|
28,000 |
|
|
|
782 |
|
|
|
28,000 |
|
|
|
2,532 |
|
Operating loss |
|
(21,776 |
) |
|
|
(36,941 |
) |
|
|
(49,764 |
) |
|
|
(67,008 |
) |
Interest expense, net |
|
(9,231 |
) |
|
|
(7,641 |
) |
|
|
(16,952 |
) |
|
|
(13,543 |
) |
Loss before provision
(benefit) for income taxes |
|
(31,007 |
) |
|
|
(44,582 |
) |
|
|
(66,716 |
) |
|
|
(80,551 |
) |
Provision (benefit) for income
taxes |
|
1,107 |
|
|
|
(9,227 |
) |
|
|
3,193 |
|
|
|
(16,363 |
) |
Net loss |
$ |
(32,114 |
) |
|
$ |
(35,355 |
) |
|
$ |
(69,909 |
) |
|
$ |
(64,188 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share |
|
|
|
|
|
|
|
Basic |
$ |
(2.51 |
) |
|
$ |
(2.82 |
) |
|
$ |
(5.50 |
) |
|
$ |
(5.16 |
) |
Diluted |
$ |
(2.51 |
) |
|
$ |
(2.82 |
) |
|
$ |
(5.50 |
) |
|
$ |
(5.16 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
12,772 |
|
|
|
12,522 |
|
|
|
12,707 |
|
|
|
12,448 |
|
Diluted |
|
12,772 |
|
|
|
12,522 |
|
|
|
12,707 |
|
|
|
12,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE CHILDREN’S PLACE, INC.RECONCILIATION
OF NON-GAAP FINANCIAL INFORMATION TO GAAP(In
thousands, except per share
amounts)(Unaudited) |
|
|
|
|
|
Second Quarter Ended |
|
Year-to-Date Ended |
|
August 3,2024 |
|
July 29,2023 |
|
August 3,2024 |
|
July 29,2023 |
|
|
|
|
|
|
|
|
Net loss |
$ |
(32,114 |
) |
|
$ |
(35,355 |
) |
|
$ |
(69,909 |
) |
|
$ |
(64,188 |
) |
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Asset impairment charges |
|
28,000 |
|
|
|
782 |
|
|
|
28,000 |
|
|
|
2,532 |
|
Restructuring costs |
|
6,104 |
|
|
|
9,659 |
|
|
|
6,367 |
|
|
|
9,928 |
|
Credit
agreement/lender-required consulting |
|
1,102 |
|
|
|
— |
|
|
|
1,852 |
|
|
|
— |
|
Professional and consulting
fees |
|
422 |
|
|
|
— |
|
|
|
422 |
|
|
|
— |
|
Accelerated depreciation |
|
256 |
|
|
|
907 |
|
|
|
1,813 |
|
|
|
907 |
|
Fleet optimization |
|
123 |
|
|
|
81 |
|
|
|
708 |
|
|
|
1,168 |
|
Change of control |
|
— |
|
|
|
— |
|
|
|
14,589 |
|
|
|
— |
|
Broken financing and
restructuring fees |
|
— |
|
|
|
— |
|
|
|
6,661 |
|
|
|
— |
|
Canada distribution center
closure |
|
— |
|
|
|
— |
|
|
|
781 |
|
|
|
— |
|
Reversal of legal settlement
accrual |
|
— |
|
|
|
— |
|
|
|
(2,279 |
) |
|
|
— |
|
Contract termination
costs |
|
— |
|
|
|
546 |
|
|
|
— |
|
|
|
2,962 |
|
Aggregate impact of non-GAAP
adjustments |
|
36,007 |
|
|
|
11,975 |
|
|
|
58,914 |
|
|
|
17,497 |
|
Income tax effect (1) |
|
— |
|
|
|
(3,113 |
) |
|
|
— |
|
|
|
(4,549 |
) |
Net impact of non-GAAP
adjustments |
|
36,007 |
|
|
|
8,862 |
|
|
|
58,914 |
|
|
|
12,948 |
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss) |
$ |
3,893 |
|
|
$ |
(26,493 |
) |
|
$ |
(10,995 |
) |
|
$ |
(51,240 |
) |
|
|
|
|
|
|
|
|
GAAP net loss per common
share |
$ |
(2.51 |
) |
|
$ |
(2.82 |
) |
|
$ |
(5.50 |
) |
|
$ |
(5.16 |
) |
|
|
|
|
|
|
|
|
Adjusted net income (loss) per
common share |
$ |
0.30 |
|
|
$ |
(2.12 |
) |
|
$ |
(0.87 |
) |
|
$ |
(4.12 |
) |
(1) The tax effects of the non-GAAP items are calculated based
on the statutory rate of the jurisdiction in which the discrete
item resides, adjusted for the impact of any valuation
allowance.
|
|
|
|
THE CHILDREN’S PLACE, INC.RECONCILIATION
OF NON-GAAP FINANCIAL INFORMATION TO GAAP(In
thousands, except per share
amounts)(Unaudited) |
|
|
|
|
|
Second Quarter Ended |
|
Year-to-Date Ended |
|
August 3,2024 |
|
July 29,2023 |
|
August 3,2024 |
|
July 29,2023 |
|
|
|
|
|
|
|
|
Operating loss |
$ |
(21,776 |
) |
|
$ |
(36,941 |
) |
|
$ |
(49,764 |
) |
|
$ |
(67,008 |
) |
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Asset impairment charges |
|
28,000 |
|
|
|
782 |
|
|
|
28,000 |
|
|
|
2,532 |
|
Restructuring costs |
|
6,104 |
|
|
|
9,659 |
|
|
|
6,367 |
|
|
|
9,928 |
|
Credit
agreement/lender-required consulting |
|
1,102 |
|
|
|
— |
|
|
|
1,852 |
|
|
|
— |
|
Professional and consulting
fees |
|
422 |
|
|
|
— |
|
|
|
422 |
|
|
|
— |
|
Accelerated depreciation |
|
256 |
|
|
|
907 |
|
|
|
1,813 |
|
|
|
907 |
|
Fleet optimization |
|
123 |
|
|
|
81 |
|
|
|
708 |
|
|
|
1,168 |
|
Change of control |
|
— |
|
|
|
— |
|
|
|
14,589 |
|
|
|
— |
|
Broken financing and
restructuring fees |
|
— |
|
|
|
— |
|
|
|
6,661 |
|
|
|
— |
|
Canada distribution center
closure |
|
— |
|
|
|
— |
|
|
|
781 |
|
|
|
— |
|
Reversal of legal settlement
accrual |
|
— |
|
|
|
— |
|
|
|
(2,279 |
) |
|
|
— |
|
Contract termination
costs |
|
— |
|
|
|
546 |
|
|
|
— |
|
|
|
2,962 |
|
Aggregate impact of non-GAAP
adjustments |
|
36,007 |
|
|
|
11,975 |
|
|
|
58,914 |
|
|
|
17,497 |
|
|
|
|
|
|
|
|
|
Adjusted operating income
(loss) |
$ |
14,231 |
|
|
$ |
(24,966 |
) |
|
$ |
9,150 |
|
|
$ |
(49,511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE CHILDREN’S PLACE, INC.RECONCILIATION
OF NON-GAAP FINANCIAL INFORMATION TO GAAP(In
thousands, except per share
amounts)(Unaudited) |
|
|
|
|
|
|
Second Quarter Ended |
|
|
Year-to-Date Ended |
|
August 3,2024 |
|
|
July 29,2023 |
|
|
August 3,2024 |
|
|
July 29,2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
111,794 |
|
|
$ |
87,759 |
|
|
$ |
204,535 |
|
|
$ |
184,220 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Change of control |
|
— |
|
|
|
— |
|
|
|
905 |
|
|
|
— |
|
Aggregate impact of non-GAAP
adjustments |
|
— |
|
|
|
— |
|
|
|
905 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit |
$ |
111,794 |
|
|
$ |
87,759 |
|
|
$ |
205,440 |
|
|
$ |
184,220 |
|
|
Second Quarter Ended |
|
Year-to-Date Ended |
|
August 3,2024 |
|
July 29,2023 |
|
August 3,2024 |
|
July 29,2023 |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
$ |
96,065 |
|
|
$ |
111,965 |
|
|
$ |
205,159 |
|
|
$ |
224,895 |
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Restructuring costs |
|
(6,104 |
) |
|
|
(9,659 |
) |
|
|
(6,367 |
) |
|
|
(9,928 |
) |
Credit
agreement/lender-required consulting |
|
(1,102 |
) |
|
|
— |
|
|
|
(1,852 |
) |
|
|
— |
|
Professional and consulting
fees |
|
(422 |
) |
|
|
— |
|
|
|
(422 |
) |
|
|
— |
|
Fleet optimization |
|
(123 |
) |
|
|
(81 |
) |
|
|
(708 |
) |
|
|
(1,168 |
) |
Change of control |
|
— |
|
|
|
— |
|
|
|
(13,684 |
) |
|
|
— |
|
Broken financing deal |
|
— |
|
|
|
— |
|
|
|
(6,661 |
) |
|
|
— |
|
Canada distribution center
closure |
|
— |
|
|
|
— |
|
|
|
(781 |
) |
|
|
— |
|
Reversal of legal settlement
accrual |
|
— |
|
|
|
— |
|
|
|
2,279 |
|
|
|
— |
|
Contract termination
costs |
|
— |
|
|
|
(546 |
) |
|
|
|
|
(2,962 |
) |
Aggregate impact of non-GAAP
adjustments |
|
(7,751 |
) |
|
|
(10,286 |
) |
|
|
(28,196 |
) |
|
|
(14,058 |
) |
|
|
|
|
|
|
|
|
Adjusted selling, general and
administrative expenses |
$ |
88,314 |
|
|
$ |
101,679 |
|
|
$ |
176,963 |
|
|
$ |
210,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE CHILDREN’S PLACE, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(In
thousands)(Unaudited) |
|
|
|
|
|
|
|
August 3,2024 |
|
February 3,2024* |
|
July 29,2023 |
|
|
|
Assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
9,573 |
|
|
$ |
13,639 |
|
|
$ |
18,846 |
|
Accounts receivable |
|
61,926 |
|
|
|
33,219 |
|
|
|
33,073 |
|
Inventories |
|
520,593 |
|
|
|
362,099 |
|
|
|
536,980 |
|
Prepaid expenses and other
current assets |
|
35,251 |
|
|
|
43,169 |
|
|
|
65,108 |
|
Total current assets |
|
627,343 |
|
|
|
452,126 |
|
|
|
654,007 |
|
|
|
|
|
|
|
Property and equipment,
net |
|
111,296 |
|
|
|
124,750 |
|
|
|
141,244 |
|
Right-of-use assets |
|
163,539 |
|
|
|
175,351 |
|
|
|
112,325 |
|
Tradenames, net |
|
13,000 |
|
|
|
41,123 |
|
|
|
70,491 |
|
Other assets, net |
|
6,236 |
|
|
|
6,958 |
|
|
|
45,018 |
|
Total assets |
$ |
921,414 |
|
|
$ |
800,308 |
|
|
$ |
1,023,085 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' (Deficit) Equity: |
|
|
|
|
|
Revolving loan |
$ |
316,655 |
|
|
$ |
226,715 |
|
|
$ |
347,546 |
|
Accounts payable |
|
215,793 |
|
|
|
225,549 |
|
|
|
262,369 |
|
Current portion of operating
lease liabilities |
|
67,610 |
|
|
|
69,235 |
|
|
|
65,266 |
|
Accrued expenses and other
current liabilities |
|
98,458 |
|
|
|
94,905 |
|
|
|
124,970 |
|
Total current liabilities |
|
698,516 |
|
|
|
616,404 |
|
|
|
800,151 |
|
|
|
|
|
|
|
Long-term debt |
|
— |
|
|
|
49,818 |
|
|
|
49,785 |
|
Related party long-term
debt |
|
165,354 |
|
|
|
— |
|
|
|
— |
|
Long-term portion of operating
lease liabilities |
|
110,596 |
|
|
|
118,073 |
|
|
|
63,714 |
|
Other long-term
liabilities |
|
15,820 |
|
|
|
25,032 |
|
|
|
23,505 |
|
Total liabilities |
|
990,286 |
|
|
|
809,327 |
|
|
|
937,155 |
|
|
|
|
|
|
|
Stockholders' (deficit)
equity |
|
(68,872 |
) |
|
|
(9,019 |
) |
|
|
85,930 |
|
Total liabilities and
stockholders' (deficit) equity |
$ |
921,414 |
|
|
$ |
800,308 |
|
|
$ |
1,023,085 |
|
* Derived from the audited consolidated financial statements
included in the Company's Annual Report on Form 10-K for the fiscal
year ended February 3, 2024.
|
|
THE CHILDREN’S PLACE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)(Unaudited) |
|
|
|
Second Quarter Ended |
|
August 3,2024 |
|
July 29,2023 |
|
|
|
|
Net loss |
$ |
(69,909 |
) |
|
$ |
(64,188 |
) |
Non-cash adjustments |
|
100,757 |
|
|
|
63,570 |
|
Working capital |
|
(225,535 |
) |
|
|
(32,087 |
) |
Net cash used in operating
activities |
|
(194,687 |
) |
|
|
(32,705 |
) |
|
|
|
|
Net cash used in investing
activities |
|
(12,478 |
) |
|
|
(18,261 |
) |
|
|
|
|
Net cash provided by financing
activities |
|
203,652 |
|
|
|
52,969 |
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
(553 |
) |
|
|
154 |
|
|
|
|
|
Net (decrease) increase in
cash and cash equivalents |
|
(4,066 |
) |
|
|
2,157 |
|
|
|
|
|
Cash and cash equivalents,
beginning of period |
|
13,639 |
|
|
|
16,689 |
|
|
|
|
|
Cash and cash equivalents, end
of period |
$ |
9,573 |
|
|
$ |
18,846 |
|
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