Latest news with #MuhammadUmair
Yahoo
2 days ago
- Business
- Yahoo
The Children's Place Reports First Quarter 2025 Results
SECAUCUS, N.J., June 06, 2025 (GLOBE NEWSWIRE) -- The Children's Place, Inc. (Nasdaq: PLCE), the largest pure-play children's specialty retailer in North America with an omni-channel portfolio of brands and an industry-leading digital-first model, today announced financial results for the Company's first fiscal quarter ended May 3, 2025. Muhammad Umair, President and Interim Chief Executive Officer said, 'The first quarter was a challenging time for our business and customers. We are not satisfied with the results, but we will continue to take actions focused on the long-term health of the Company as we strive to drive more sustainable growth and stronger performance moving forward. Our results remain under pressure due to the current macroeconomic environment, including softer consumer sentiment and particularly unseasonable weather patterns, while the lapping of our shipping threshold increase added an anticipated challenge to top-line sales. While we are not pleased with the results, management is moving with urgency to remediate, and we are currently entering the back-to-school selling season with a more balanced inventory position. We will continue to focus on improving our inventory turns and explore plans to further streamline our productivity, while reducing inefficient SG&A spending, with more to come in the near future.' 'Looking ahead for fiscal 2025, we expect to see continued top-line sales pressures but remain committed to our long-term goal of delivering profitable top-line sales, as we refine our omni-channel strategy and overall business model. While we have tightly managed our SG&A spending, we continue to seek better leverage over our expenses and reinvest in the long-term growth of the business, including plans for a revitalized loyalty program, store openings in the back-half of 2025, new product offerings that include new licensing partnerships and collaborations, along with innovative marketing initiatives to acquire new customers.' 'The current retail environment, including the tariff situation and its impact on our core customer, continues to bring significant uncertainty and headwinds to our near-term results, however, we remain confident that our sourcing diversification strategies, with no single country representing more than 20% of our total sourcing capacity, including limited exposure to China in the mid-single digit range, have us well-positioned to offset potential tariff impacts and will allow us to continue to deliver value to our customers at affordable prices.' First Quarter 2025 ResultsNet sales decreased $25.8 million, or 9.6%, to $242.1 million in the three months ended May 3, 2025, compared to $267.9 million in the three months ended May 4, 2024. The decrease in net sales was driven by a decrease in e-commerce sales due to an increase in shipping minimum thresholds to $40 from $20 in the prior year period as we continue our focus on profitable top-line sales, combined with lower traffic and conversion. The Company also experienced a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume due to lower traffic. Our stores and e-commerce sales were both negatively impacted by the current macroeconomic environment, including uncertainty around potential tariffs, which has decreased consumer sentiment. The decrease in net sales was partially offset by an increase in wholesale revenue. Comparable retail sales decreased 13.6% for the quarter, largely driven by the decrease in e-commerce revenue. Gross profit decreased $21.9 million to $70.8 million in the three months ended May 3, 2025, compared to $92.7 million in the three months ended May 4, 2024. Gross margin decreased 540 basis points to 29.2% during the three months ended May 3, 2025, compared to 34.6% in the prior year. The decrease in margin was caused by a combination of factors, including channel mix from the higher penetration of wholesale sales and a higher mix of markdown versus full price product sales, partially offset by favorability from higher shipping minimum thresholds compared to last year. Selling, general, and administrative expenses were $86.7 million in the three months ended May 3, 2025, compared to $109.1 million in the three months ended May 4, 2024. The decrease was due to a reduction in one-time costs incurred in the prior year, primarily associated with the Company's change of control and broken financing deal costs. Adjusted selling, general, and administrative expenses were $86.5 million in the three months ended May 3, 2025, compared to $88.6 million in the comparable period last year, and deleveraged 260 basis points to 35.7% of net sales, due to the lower sales combined with incremental marketing spend as a percentage of net sales. As we reinvest in marketing and focus on content, we are beginning to see initial promising indicators, as Google search interest has grown, along with an acceleration of Tik Tok followers. We have continued to control our costs well, as this represents the lowest level of Adjusted selling, general, and administrative expenses in more than 15 years for the first quarter of a fiscal year and we continue to evaluate opportunities to further optimize our operating model. Operating loss was $(24.1) million in the three months ended May 3, 2025, compared to $(28.0) million in the three months ended May 4, 2024. Adjusted operating loss was $(24.0) million in the three months ended May 3, 2025, compared to $(5.1) million in the comparable period last year. Net interest expense was $8.6 million in the three months ended May 3, 2025, compared to $7.7 million in the three months ended May 4, 2024. The increase was due to the write-off of deferred financing costs associated with the partial paydown of the first term loan entered into with the Company's majority shareholder, Mithaq Capital SPC ('Mithaq') as a result of the Company's rights offering which was completed during the first quarter, in addition to higher borrowings on the Company's revolving credit facility with Wells Fargo and other bank lenders, partially offset by lower average interest rates during the quarter. Provision for income taxes was $1.3 million in the three months ended May 3, 2025, compared to $2.1 million during the three months ended May 4, 2024. The Company continues to adjust its valuation allowance based upon its ongoing operating results. Net loss was $(34.0) million, or $(1.57) per diluted share, in the three months ended May 3, 2025, compared to $(37.8) million, or $(2.98) per diluted share, in the three months ended May 4, 2024. Adjusted net loss was $(32.8) million, or $(1.52) per diluted share, compared to $(14.9) million, or $(1.18) per diluted share, in the comparable period last year. Store Update During the first quarter, the Company's store count remained at 495 stores, as the Company did not open or close any stores. The store count at the end of the first quarter of 2024 was 518. Balance Sheet and Cash FlowAs of May 3, 2025, the Company had $5.7 million of cash and cash equivalents, $38.7 million of borrowing availability under its revolving credit facility and an additional $40.0 million in availability under the unsecured Commitment Letter provided by Mithaq, representing total liquidity of $84.4 million. The Company had $258.6 million outstanding on its revolving credit facility and has not drawn down on its Mithaq credit facility. Additionally, the Company used $43.0 million in operating cash flows in the three months ended May 3, 2025. Inventories were $422.2 million as of May 3, 2025, compared to $425.2 million as of May 4, 2024. These inventory levels were a result of a shift in our product strategy, as we better balance the mix of fashion and basic product, combined with the impacts of lower conversion. On February 6, 2025, the Company raised $90 million in capital and issued 9.2 million shares of common stock, pursuant to the completion of its rights offering. The shares issued were settled through the receipt of $29.8 million in cash, which was substantially used to prepay amounts owed under our revolving credit facility with Wells Fargo and other bank lenders, and a reduction of $60.2 million in the amount owed by the Company under its first term loan from Mithaq. Non-GAAP ReconciliationThe Company's results are reported in this press release on a GAAP and as adjusted, non-GAAP basis. Adjusted net loss, adjusted net loss per diluted share, adjusted gross profit, adjusted selling, general, and administrative expenses, and adjusted operating loss 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 ended May 3, 2025 and May 4, 2024. About The Children's PlaceThe Children's Place is the largest pure-play children's specialty retailer in North America with an omni-channel portfolio of brands and an industry-leading digital-first model. Its global retail and wholesale network includes two digital storefronts, 495 stores in North America, wholesale marketplaces and distribution in 12 countries through seven international franchise partners. The Children's Place designs, contracts to manufacture, and sells fashionable, high-quality, head-to-toe outfits predominantly at value prices, primarily under its proprietary brands: 'The Children's Place', 'Gymboree', 'Sugar & Jade', and 'PJ Place'. For more information, visit: and 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,' 'believe' 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 'Part 1, item1A. Risk Factors' section of its annual report on Form 10-K for the fiscal year ended February 1, 2025. 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 changes in trade policy and tariff regimes, including newly imposed U.S. tariffs and any responsive non-U.S. tariffs, may impact our international manufacturing and operations or our customers' discretionary spending habits, 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 litigation brought under securities, consumer protection, employment, and privacy and information security laws and regulations, risks related to the existence of a controlling shareholder, and the uncertainty of weather patterns, as well as other risks discussed in the Company's filings with the SEC from time to time. 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, CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts)(Unaudited) First Quarter Ended May 3,2025 May 4,2024 Net sales $ 242,125 $ 267,878 Cost of sales (exclusive of depreciation and amortization) 171,342 175,137 Gross profit 70,783 92,741 Selling, general and administrative expenses 86,670 109,094 Depreciation and amortization 8,230 11,635 Operating loss (24,117 ) (27,988 ) Related party interest expense (1,871 ) (389 ) Other interest expense, net (6,691 ) (7,332 ) Loss before provision for income taxes (32,679 ) (35,709 ) Provision for income taxes 1,344 2,086 Net loss $ (34,023 ) $ (37,795 ) Loss per common share (1) Basic $ (1.57 ) $ (2.98 ) Diluted $ (1.57 ) $ (2.98 ) Weighted average common shares outstanding (1) Basic 21,629 12,665 Diluted 21,629 12,665 (1) In connection with the completion of the rights offering on February 6, 2025, the Company's weighted average common shares outstanding and basic and diluted loss per share were retroactively adjusted for all periods presented by a factor of 1.002. THE CHILDREN'S PLACE, OF NON-GAAP FINANCIAL INFORMATION TO GAAP(In thousands, except per share amounts)(Unaudited) First Quarter Ended May 3,2025 May 4,2024 Net loss $ (34,023 ) $ (37,795 ) Non-GAAP adjustments: Loss on extinguishment of debt 1,039 — Restructuring costs 934 264 Reversal of legal settlement accrual (796 ) (2,279 ) Change of control — 14,589 Broken financing and restructuring fees — 6,661 Accelerated depreciation — 1,557 Canada distribution center closure — 781 Credit agreement — 750 Fleet optimization — 585 Aggregate impact of non-GAAP adjustments 1,177 22,908 Income tax effect (1) — — Net impact of non-GAAP adjustments 1,177 22,908 Adjusted net loss $ (32,846 ) $ (14,887 ) GAAP net loss per diluted common share (2) $ (1.57 ) $ (2.98 ) Adjusted net loss per diluted common share (2) $ (1.52 ) $ (1.18 ) (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.(2) In connection with the completion of the rights offering on February 6, 2025, the Company's weighted average common shares outstanding and basic and diluted loss per share were retroactively adjusted for all periods presented by a factor of 1.002. THE CHILDREN'S PLACE, OF NON-GAAP FINANCIAL INFORMATION TO GAAP(In thousands)(Unaudited) First Quarter Ended May 3,2025 May 4,2024 Operating loss $ (24,117 ) $ (27,988 ) Non-GAAP adjustments: Restructuring costs 934 264 Reversal of legal settlement accrual (796 ) (2,279 ) Change of control — 14,589 Broken financing and restructuring fees — 6,661 Accelerated depreciation — 1,557 Canada distribution center closure — 781 Credit agreement — 750 Fleet optimization — 585 Aggregate impact of non-GAAP adjustments 138 22,908 Adjusted operating loss $ (23,979 ) $ (5,080 ) THE CHILDREN'S PLACE, OF NON-GAAP FINANCIAL INFORMATION TO GAAP(In thousands)(Unaudited) First Quarter Ended May 3,2025 May 4,2024 Gross profit $ 70,783 $ 92,741 Non-GAAP adjustments: Change of control — 905 Aggregate impact of non-GAAP adjustments — 905 Adjusted gross profit $ 70,783 $ 93,646 First Quarter Ended May 3,2025 May 4,2024 Selling, general and administrative expenses $ 86,670 $ 109,094 Non-GAAP adjustments: Reversal of legal settlement accrual 796 2,279 Restructuring costs (934 ) (264 ) Change of control — (13,684 ) Broken financing and restructuring fees — (6,661 ) Canada distribution center closure — (781 ) Credit agreement — (750 ) Fleet optimization — (585 ) Aggregate impact of non-GAAP adjustments (138 ) (20,446 ) Adjusted selling, general and administrative expenses $ 86,532 $ 88,648 THE CHILDREN'S PLACE, CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited) May 3,2025 February 12025* May 4,2024 Assets: Cash and cash equivalents $ 5,694 $ 5,347 $ 12,960 Accounts receivable 41,337 42,701 28,286 Inventories 422,204 399,602 425,156 Prepaid expenses and other current assets 31,374 20,354 43,210 Total current assets 500,609 468,004 509,612 Property and equipment, net 92,094 97,487 116,779 Right-of-use assets 166,008 161,595 173,987 Tradenames, net 13,000 13,000 41,000 Other assets, net 7,891 7,466 6,957 Total assets $ 779,602 $ 747,552 $ 848,335 Liabilities and Stockholders' Equity (Deficit): Revolving loan $ 258,623 $ 245,659 $ 226,100 Accounts payable 131,392 126,716 193,100 Current portion of operating lease liabilities 66,522 67,407 70,668 Accrued expenses and other current liabilities 87,072 78,336 83,348 Total current liabilities 543,609 518,118 573,216 Related party long-term debt 107,010 165,974 166,635 Long-term portion of operating lease liabilities 112,667 107,287 118,363 Other long-term liabilities 14,901 15,584 24,971 Total liabilities 778,187 806,963 883,185 Stockholders' equity (deficit) 1,415 (59,411 ) (34,850 ) Total liabilities and stockholders' equity (deficit) $ 779,602 $ 747,552 $ 848,335 * Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025. THE CHILDREN'S PLACE, CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited) First Quarter Ended May 3,2025 May 4,2024 Net loss $ (34,023 ) $ (37,795 ) Non-cash adjustments 29,216 43,818 Working capital (38,151 ) (116,779 ) Net cash used in operating activities (42,958 ) (110,756 ) Net cash used in investing activities (3,413 ) (4,694 ) Net cash provided by financing activities 42,298 114,889 Effect of exchange rate changes on cash and cash equivalents 4,420 (118 ) Net increase (decrease) in cash and cash equivalents 347 (679 ) Cash and cash equivalents, beginning of period 5,347 13,639 Cash and cash equivalents, end of period $ 5,694 $ 12,960 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Arab News
3 days ago
- Business
- Arab News
Beautiful Rajanpuri Nukra goats highly prized, and costly, at Islamabad's Eid market
ISLAMABAD: With their snow-white coats, drooping pink ears and regal build, Rajanpuri Nukra goats are turning heads and emptying wallets at Islamabad's bustling Eid Al-Adha cattle market this year. A strain of the Beetal goat native to the Rajanpur region of Pakistan's Punjab province, they are also known for their large size and muscular build. Highly prized for their meat, and a popular choice for Eid Al-Adha sacrifices, some have sold for as much as Rs2 million ($7,140) this season. At Islamabad's cattle market on Bhatta Chowk earlier this week, many people gathered around the goats to admire their appearance and snap pictures, while others negotiated deals. 'We have come here from Rajanpur as people in Islamabad and Rawalpindi prefer Rajanpuri goats over other breeds due to their white and pink coloration and impressive height,' said merchant Hamza Ali. He added that he had brought 20 of the prized animals to the market and sold most of them within four days. 'We're getting good prices for them here. Of the 20 goats we brought, one sold for Rs2 million last night.' Traders at the market have been selling the Rajanpuri goats for anywhere between $715 and $7,140, several merchants said. Highlighting the care involved, Muhammad Umair, a cattle trader, said the goats are nurtured from birth, referring to them as a 'purebred line.' 'We divide them into two groups. Those with good height and large size receive a special diet that includes wanda, choker, desi ghee and other nutritious ingredients,' he told Arab News as he petted one of his animals. Goats similar in size to regular breeds are available at lower prices but still higher than other strains. 'It has large pink ears, white eyes, and a pink nose, along with a pure white coat, which makes it highly attractive to buyers,' Umair added. Muhammad Bilal, a 23-year-old student from Islamabad, said he wanted to buy a Rajanpuri goat because of its white coat and long ears. 'Although the price is a bit higher, we will still buy it because we really like it,' he told Arab News. Another customer Ilyas Khan, 40, expressed frustration over the high prices, saying they were unaffordable for most market visitors. 'My children took pictures with them,' Khan, a businessman, said. 'But these are out of our reach as even the smallest ones are starting at Rs150,000, which is too much.'
Arab News
3 days ago
- Business
- Arab News
Beauty at a price: Rajanpuri Nukra goats steal the show at Islamabad's Eid cattle market
ISLAMABAD: With their snow-white coats, drooping pink ears and regal built, Rajanpuri Nukra goats are turning heads and emptying wallets at Islamabad's bustling Eid Al-Adha cattle market this year. A strain of the Beetal goat native to the Rajanpur region of Pakistan's Punjab province, these goats are known for their large size, muscular build and striking white coat. They are highly prized for meat production and are a popular choice for Eid Al-Adha sacrifices, with some selling for as much as Rs2 million ($7,140) this season. At Islamabad's cattle market on Bhatta Chowk earlier this week, many people gathered around the goats to admire their appearance and snap pictures, while others negotiated deals. 'We have come here from Rajanpur as people in Islamabad and Rawalpindi prefer Rajanpuri goats over other breeds due to their white and pink coloration and impressive height,' said merchant Hamza Ali, adding that he had brought 20 of the prized animals to the market and sold most of them within four days. 'We're getting good prices for them here. Of the 20 goats we brought, one sold for Rs2 million last night.' On an average, traders at the market have been selling the Rajanpuri goats for anywhere between Rs200,000 and Rs2 million ($715 to $7,140), a number of merchants said. Highlighting the care involved, Muhammad Umair, a cattle trader, said the goats were nurtured from birth, referring to them as a 'purebred line.' 'We divide them into two groups. Those with good height and large size receive a special diet that includes wanda, choker, desi ghee and other nutritious ingredients,' he told Arab News as he petted one of his animals. Goats similar in size to regular breeds were available at lower prices but still higher than other strains. 'It has large pink ears, white eyes, and a pink nose, along with a pure white coat, which makes it highly attractive to buyers,' Umair added. Muhammad Bilal, a 23-year-old student from Islamabad, said he wanted to buy a Rajanpuri goat because of its white coat and long ears. 'Although the price is a bit higher, we will still buy it because we really like it,' he told Arab News. Another customer Ilyas Khan, 40, expressed frustration over the high prices of the breed, saying they were unaffordable for most visitors at the market. 'My children took pictures with them,' Khan, a businessman, said, 'but these are out of our reach as even the smallest ones are starting at Rs150,000 ($535), which is too much.'
Globe and Mail
11-04-2025
- Business
- Globe and Mail
The Children's Place Reports Fourth Quarter and Full Year 2024 Results
Reports Third Consecutive Quarter of Adjusted Operating Profits Net Sales of $409 million for Fourth Quarter and $1.386 billion for Full Year Significant Improvement in Gross Profit Margin to 29% for Fourth Quarter and 33% for Full Year Lowest Level of SG&A Spending in more than 15 Years during Fourth Quarter and Full Year Improvement in Operating Income of $68.6 million for Fourth Quarter 2024 versus 2023 Significant Improvement in Liquidity Position with Completion of $90 Million Rights Offering subsequent to Year-End SECAUCUS, N.J., April 11, 2025 (GLOBE NEWSWIRE) -- The Children's Place, Inc. (Nasdaq: PLCE), the largest pure-play children's specialty retailer in North America with an omni-channel portfolio of brands and an industry-leading digital-first model, today announced financial results for the fourth quarter ended February 1, 2025. Muhammad Umair, President and Interim Chief Executive Officer said, 'During the fourth quarter, we continued our efforts to expand gross margin, reduce inefficient SG&A spending and remain laser-focused on improving the profitability of the business, which has enabled us to achieve a third consecutive quarter of adjusted operating profits. As expected, along with the ongoing transformation of our business model, these strategic changes and other macroeconomic headwinds have continued to put pressure on top-line sales. However, we remain extremely pleased with the resulting sequential improvement in the gross profit margin for all four quarters this year.' Mr. Umair added, 'With the recent completion of our rights offering, we were also successful in deleveraging our balance sheet. We were able to raise additional capital of $90 million, with $29.8 million in gross cash proceeds, and the remaining $60.2 million being used to pay down a substantial portion of our first term loan from Mithaq. A pro forma balance sheet has been presented in this press release to reflect the impact of the rights offering on our balance sheet, had it been settled prior to the close of our fiscal 2024 year-end.' Mr. Umair continued, 'Looking ahead for fiscal 2025, we remain determined to deliver profitable top-line sales as we continue to refine our omni-channel strategy and rebalance our product mix, by offering relevant product that resonates with parents. As we continue to optimize our marketing spend, we will re-invest in a revitalized loyalty program with a best-in-class unified customer database that will allow us to acquire, retain and reactivate our customers. As part of our reimagined business strategy, we are committed to strengthening and enhancing our store portfolio by improving the performance of our existing store fleet, while developing innovative designs to be used in targeted store openings for both The Children's Place and Gymboree brands in the back-half of 2025 and beyond. Our Executive Chairman, Turki S. AlRajhi, provides a long-term outlook for the Company, with further details on these strategic initiatives and other business priorities, in his letter to shareholders that can be found on our corporate website at: Mr. Umair concluded, 'At a time when many families are already feeling pressure on their wallets, potential tariffs could represent additional headwinds for the apparel sector. We do expect margin pressure as a result, though we believe our existing country migration and diversification strategies have us well-positioned to partially offset potential impacts. At the same time, we see an opportunity as families grow increasingly value-conscious to continue to deliver quality at accessible prices, which can position us to capture trade-down traffic and support our customers when they need us most.' Fourth Quarter 2024 Results Net sales decreased $46.4 million, or 10.2%, to $408.6 million in the three months ended February 1, 2025, compared to $455.0 million in the three months ended February 3, 2024. The decrease in net sales was driven by a combination of the anticipated decrease in e-commerce revenue, as the Company proactively rationalized its unprofitable promotional strategies, inflated marketing spending and 'free shipping' offers to improve profitability. The Company also experienced a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume. This was partially offset by an increase in wholesale revenue, as we continue to strengthen relationships with our partners. We are exploring opportunities to expand our wholesale relationships and identify new revenue streams that can drive further revenue growth and profitability. Comparable retail sales decreased 15.3% for the quarter, largely driven by the planned decrease in e-commerce revenue, as the Company proactively sacrificed unprofitable sales to improve profitability. Gross profit increased $17.7 million to $116.6 million in the three months ended February 1, 2025, compared to $98.9 million in the three months ended February 3, 2024. The gross margin rate increased 680 basis points to 28.5% during the three months ended February 1, 2025, compared to 21.7% in the prior year period. The increase in margin 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 in input costs were combined with the success of the Company's strategies to rationalize profit-draining promotions and limit unprofitable shipping offers, in addition to optimized shipping carrier rates, which resulted in a significant reduction in freight costs. Selling, general, and administrative expenses were well-controlled at $100.6 million in the three months ended February 1, 2025, compared to $117.6 million in the three months ended February 3, 2024. Adjusted selling, general, and administrative expenses were $99.5 million in the three months ended February 1, 2025, compared to $118.7 million in the comparable period last year, and leveraged 170 basis points to 24.4% of net sales, despite the planned lower sales. This decrease was due to significant reductions in marketing expenses, as the Company eliminated inflated and unprofitable marketing costs and to a lesser extent, due to reductions in store payroll and corporate payroll. Similar to the third quarter, this represents the lowest level of Adjusted selling, general, and administrative expenses in more than 15 years for the fourth quarter of a fiscal year. Operating income was $6.8 million in the three months ended February 1, 2025, compared to Operating loss of $(61.8) million in the three months ended February 3, 2024. Adjusted operating income was $8.3 million in the three months ended February 1, 2025, compared to an Adjusted operating loss of $(30.9) million in the comparable period last year, and leveraged 880 basis points to 2.0% of net sales. Net interest expense was $8.7 million in the three months ended February 1, 2025, compared to $8.5 million in the three months ended February 3, 2024. The increase was due to the higher amortization of deferred financing costs associated with the unsecured loans entered into with the Company's majority shareholder, Mithaq Capital SPC ('Mithaq'), partially offset by lower average interest rates associated with the Company's revolving credit facility. Provision for income taxes was $6.1 million in the three months ended February 1, 2025, compared to $58.6 million during the three months ended February 3, 2024. The decrease was primarily driven by the establishment of a valuation allowance against the Company's net deferred tax assets in the comparable period last year. The Company continues to adjust the valuation allowance based upon its ongoing operating results. Net loss was $(8.0) million, or $(0.62) per diluted share, in the three months ended February 1, 2025, compared to $(128.8) million, or $(10.24) per diluted share, in the three months ended February 3, 2024. Adjusted net loss was $(9.6) million, or $(0.75) per diluted share, compared to $(92.7) million, or $(7.37) per diluted share, in the comparable period last year. Fiscal Year 2024 Results Net sales decreased $216.2 million, or 13.5%, to $1.386 billion in the twelve months ended February 1, 2025, compared to $1.603 billion in the twelve months ended February 3, 2024. The decrease in net sales was primarily due to anticipated declines in e-commerce 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. The Company also experienced a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume. This was partially offset by an increase in wholesale revenue, as we continue to strengthen relationships with our partners. Comparable retail sales decreased 13.4% for the twelve months ended February 1, 2025, largely due to the planned decrease in e-commerce revenue. Gross profit increased $14.2 million to $459.5 million in the twelve months ended February 1, 2025, compared to $445.3 million in the twelve months ended February 3, 2024. The gross margin rate increased 530 basis points to 33.1% during the twelve months ended February 1, 2025, compared to 27.8% in the prior year period. The increase in margin 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 in input costs were combined with the success of the Company's strategies to rationalize profit-draining promotions and limit unprofitable shipping offers, in addition to optimized shipping carrier rates, which resulted in a significant reduction in freight costs. Selling, general, and administrative expenses were $405.6 million in the twelve months ended February 1, 2025, compared to $447.3 million in the twelve months ended February 3, 2024. Adjusted selling, general, and administrative expenses were $370.3 million in the twelve months ended February 1, 2025, compared to $432.5 million in the prior year, and leveraged 30 basis points to 26.7% of net sales. This decrease was due to significant reductions in marketing expenses, as the Company eliminated inflated and unprofitable marketing costs and to a lesser extent, due to reductions in store payroll, corporate payroll and professional fees. The Company was successful in reducing Adjusted selling, general, and administrative expenses by $62.3 million despite an increase in incentive compensation and equity compensation of $11.1 million. This represents the lowest level of Adjusted selling, general, and administrative expenses in more than 15 years for a full fiscal year. Operating loss was $(13.7) million in the twelve months ended February 1, 2025, compared to $(83.8) million in the twelve months ended February 3, 2024. Operating loss was impacted by incremental expenses of $66.4 million, which included an impairment charge of $28.0 million on the Gymboree tradename, primarily due to reductions in Gymboree sales forecasts, restructuring costs of $11.7 million primarily due to changes in the senior leadership team, several charges due to the Company's change of control due to the investment in the Company by Mithaq, including $10.8 million of non-cash equity compensation charges and $3.8 million in other fees, and $7.0 million of financing-related charges related to several new financing initiatives. These charges have been classified as non-GAAP adjustments leading to a shift back to profitability with an Adjusted operating income of $52.7 million in the twelve months ended February 1, 2025, or an improvement of $85.2 million compared to an Adjusted operating loss of $(32.5) million in the prior year, and leveraged 580 basis points to 3.8% of net sales. Net interest expense was $35.7 million in the twelve months ended February 1, 2025, compared to $30.0 million in the twelve months ended February 3, 2024. The increase in interest expense was primarily driven by higher interest-equivalent charges from loans entered into with Mithaq, and higher average interest rates associated with the Company's revolving credit facility due to the impact of refinancings, partially offset by lower average borrowings on the revolving credit facility. Provision for income taxes was $8.4 million in the twelve months ended February 1, 2025, compared to $40.7 million during the twelve months ended February 3, 2024. The decrease was primarily driven by the establishment of a valuation allowance against the Company's net deferred tax assets in the prior year and a shift in the jurisdictional earnings mix. The Company continues to adjust the valuation allowance based upon its ongoing operating results. Net loss, which included certain non-cash impairment charges, restructuring charges, and charges due to the Company's change in control, was $(57.8) million, or $(4.53) per diluted share, in the twelve months ended February 1, 2025, compared to $(154.5) million, or $(12.34) per diluted share, in the twelve months ended February 3, 2024. Adjusted net income was $5.5 million, or $0.43 per diluted share, compared to an Adjusted net loss of $(103.3) million, or $(8.25) per diluted share, in the prior year. Store Update During the fourth quarter, the Company opened its first new store in more than two years, which was a Gymboree stand-alone store located in Garden State Plaza Mall. The Company closed 16 stores in the three months ended February 1, 2025, and ended the year with 495 stores. Balance Sheet and Cash Flow As of February 1, 2025, the Company had $5.3 million of cash and cash equivalents, $40.2 million of borrowing availability under its revolving credit facility and an additional $40.0 million of availability under the unsecured Commitment Letter provided by Mithaq, representing total liquidity of $85.5 million. The Company had $245.7 million outstanding on its revolving credit facility and has not drawn down on its Mithaq credit facility. Additionally, the Company used $117.6 million in operating cash flows in the twelve months ended February 1, 2025. Inventories were $399.6 million as of February 1, 2025, compared to $362.1 million as of February 3, 2024. On February 6, 2025, the Company raised $90 million in capital and issued 9.2 million shares of Common Stock, pursuant to the completion of its rights offering. The shares issued were settled through the receipt of $29.8 million in cash, which was substantially used to prepay amounts owed under our revolving credit facility with Wells Fargo and other bank lenders, and a reduction of $60.2 million in the amount owed by the Company under its first term loan from Mithaq. Had the transaction been completed on February 1, 2025, the cash available to prepay our revolving credit facility would have increased to $35.2 million and our aggregate long-term debt due to Mithaq would have decreased to $106.8 million, as of the end of the fiscal year. Refer to the 'Pro forma Balance Sheet' presented later in this press release which reflects the impact of the rights offering on the Company's financial position. Non-GAAP Reconciliation The 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, and adjusted operating income (loss) 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 period and 52-week period ended February 1, 2025, and for the 14-week period and 53-week period ended February 3, 2024. About The Children's Place The Children's Place is the largest pure-play children's specialty retailer in North America with an omni-channel portfolio of brands and an industry-leading digital-first model. Its global retail and wholesale network includes two digital storefronts, 495 stores in North America, wholesale marketplaces and distribution in 13 countries through six international franchise partners. The Children's Place designs, contracts to manufacture, and sells fashionable, high-quality, head-to-toe outfits predominantly at value prices, primarily under its proprietary brands: 'The Children's Place', 'Gymboree', 'Sugar & Jade', and 'PJ Place'. For more information, visit: and Forward-Looking Statements This 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,' 'believe' 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 'Part 1, item1A. 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 changes in trade policy and tariff regimes, including newly imposed U.S. tariffs and any responsive non-U.S. tariffs, may impact the Company's international manufacturing and operations or our customers' discretionary spending habits, 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, risks related to the existence of a controlling shareholder, and the uncertainty of weather patterns, as well as other risks discussed in the Company's filings with the SEC from time to time. 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. (In thousands, except per share amounts) (Unaudited) Fourth Quarter Ended Fiscal Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Net sales $ 408,562 $ 455,034 $ 1,386,269 $ 1,602,508 Cost of sales 291,977 356,123 926,808 1,157,234 Gross profit 116,585 98,911 459,461 445,274 Selling, general and administrative expenses 100,574 117,587 405,550 447,343 Depreciation and amortization 9,206 11,652 39,612 47,186 Asset impairment charges — 31,429 28,000 34,543 Operating income (loss) 6,805 (61,757) (13,701) (83,798) Related party interest expense (1,939) — (6,493) — Other interest expense, net (6,778) (8,518) (29,254) (30,000) Loss before provision for income taxes (1,912) (70,275) (49,448) (113,798) Provision for income taxes 6,078 58,561 8,371 40,743 Net loss $ (7,990) $ (128,836) $ (57,819) $ (154,541) Loss per common share (1) Basic $ (0.62) $ (10.24) $ (4.53) $ (12.34) Diluted $ (0.62) $ (10.24) $ (4.53) $ (12.34) Weighted average common shares outstanding (1) Basic 12,805 12,577 12,766 12,522 Diluted 12,805 12,577 12,766 12,522 (1) In connection with the completion of the rights offering on February 6, 2025, the Company's weighted average common shares outstanding and basic and diluted loss per share were retroactively adjusted for all periods presented by a factor of 1.002. THE CHILDREN'S PLACE, INC. (In thousands, except per share amounts) (Unaudited) Fourth Quarter Ended Fiscal Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Net loss $ (7,990) $ (128,836) $ (57,819) $ (154,541) Non-GAAP adjustments: Fleet optimization 571 1,546 1,428 3,086 Restructuring costs 498 (225) 11,678 10,458 Accelerated depreciation 432 597 2,246 1,959 Asset impairment charges — 31,429 28,000 34,543 Change of control — — 14,589 — Contract termination costs — — 7,008 2,961 Credit agreement / lender-required consulting fees — 1,012 2,390 1,762 Canada distribution center closure — — 781 — Professional and consulting fees — — 580 — Provision for legal settlement — 3,000 (2,279) 3,000 Settlement payment received — (6,461) — (6,461) Aggregate impact of non-GAAP adjustments 1,501 30,898 66,421 51,308 Income tax effect (1) (3,113) 5,228 (3,113) (80) Net impact of non-GAAP adjustments (1,612) 36,126 63,308 51,228 Adjusted net income (loss) $ (9,602) $ (92,710) $ 5,489 $ (103,313) GAAP net loss per common share $ (0.62) $ (10.24) $ (4.53) $ (12.34) Adjusted net income (loss) per common share $ (0.75) $ (7.37) $ 0.43 $ (8.25) (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. (In thousands, except per share amounts) (Unaudited) Fourth Quarter Ended Fiscal Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Operating income (loss) $ 6,805 $ (61,757) $ (13,701) $ (83,798) Non-GAAP adjustments: Fleet optimization 571 1,546 1,428 3,086 Restructuring costs 498 (225) 11,678 10,458 Accelerated depreciation 432 597 2,246 1,959 Asset impairment charges — 31,429 28,000 34,543 Change of control — — 14,589 — Contract termination costs — — 7,008 2,961 Credit agreement / lender-required consulting fees — 1,012 2,390 1,762 Canada distribution center closure — — 781 — Professional and consulting fees — — 580 — Provision for legal settlement — 3,000 (2,279) 3,000 Settlement payment received — (6,461) — (6,461) Aggregate impact of non-GAAP adjustments 1,501 30,898 66,421 51,308 Adjusted operating income (loss) $ 8,306 $ (30,859) $ 52,720 $ (32,490) Fourth Quarter Ended Fiscal Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Selling, general and administrative expenses $ 100,574 $ 117,587 $ 405,550 $ 447,343 Non-GAAP adjustments: Fleet optimization (571) (1,546) (1,428) (3,086) Restructuring costs (498) 225 (11,678) (10,458) Change of control — — (13,684) — Contract termination costs — — (7,008) (2,961) Credit agreement / lender-required consulting fees (1,012) (2,390) (1,762) Canada distribution center closure — — (781) — Professional and consulting fees — — (580) — Provision for legal settlement — (3,000) 2,279 (3,000) Settlement payment received — 6,461 — 6,461 Aggregate impact of non-GAAP adjustments (1,069) 1,128 (35,270) (14,806) Adjusted selling, general and administrative expenses $ 99,505 $ 118,715 $ 370,280 $ 432,537 (In thousands) February 1, 2025 February 3, 2024* Assets: Cash and cash equivalents $ 5,347 $ 13,639 Accounts receivable 42,701 33,219 Inventories 399,602 362,099 Prepaid expenses and other current assets 20,354 43,169 Total current assets 468,004 452,126 Property and equipment, net 97,487 124,750 Right-of-use assets 161,595 175,351 Tradenames, net 13,000 41,123 Other assets 7,466 6,958 Total assets $ 747,552 $ 800,308 Liabilities and Stockholders' Deficit: Revolving loan $ 245,659 $ 226,715 Accounts payable 126,716 225,549 Current portion of operating lease liabilities 67,407 69,235 Accrued expenses and other current liabilities 78,336 94,905 Total current liabilities 518,118 616,404 Long-term debt — 49,818 Related party long-term debt 165,974 — Long-term portion of operating lease liabilities 107,287 118,073 Other long-term liabilities 15,584 25,032 Total liabilities 806,963 809,327 Stockholders' deficit (59,411) (9,019) Total liabilities and stockholders' deficit $ 747,552 $ 800,308 * 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.
