Revamped loyalty program brings exciting flexibility, personalization and an elevated, fresh experience for today’s modern familiesSECAUCUS, N.J., Oct. 07, 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, announced upgrades to its My Place Rewards loyalty program, reimagined to reflect the evolving needs of families and set a new standa ...

Summary of The Children's Place Conference Call Company Overview - The Children's Place (NasdaqGS:PLCE) is a pure-play children's specialty retailer focusing on an omnichannel experience and a portfolio of brands with long-term potential [2][4] - The company has undergone significant changes, including a new management team and a transformation program aimed at sustainable growth [2][4] Key Strategic Pillars 1. **Customer Focus**: The company aims to enhance customer engagement by creating emotional connections with its brands and targeting distinct customer segments [5][6] 2. **Product Strategy**: Emphasis on delivering fashionable, trend-right collections while reducing reliance on basic products [5][9] 3. **Distribution Expansion**: Plans to broaden distribution channels, including stores, e-commerce, and international partnerships [11][12] Financial Performance - In Q2 2025, sales declined by 6.8%, an improvement from a 9.6% decline in Q1 [14] - July 2025 marked the first month in 18 periods with year-over-year sales growth, driven by back-to-school season [14] - Gross profit margin decreased by 100 basis points, primarily due to capitalized costs, but was offset by better product margins [15] Transformation Initiatives - The company is focused on improving its balance sheet, liquidity, and operational efficiency [3][19] - A goal to reduce home office payroll to under $80 million by fiscal 2026 has been set, down from over $120 million [17][26] - The transformation program is expected to generate at least $40 million in benefits over the next three years [17][31] Brand Positioning - The Children's Place is repositioning itself as a destination for style and expression, moving beyond basic apparel [7][8] - Gymboree is positioned as a premium lifestyle brand, complementing The Children's Place [8] Customer Engagement and Loyalty - The loyalty program is a key growth lever, with members shopping twice as often and spending 20% more than non-members [8] - The company is redesigning its loyalty program to enhance customer recognition and rewards [8] Market Challenges and Opportunities - The company acknowledges past market share losses but believes its new strategies will help regain it [37] - Licensing partnerships with brands like Sanrio and Nike are expected to drive growth and attract new customers [10][11] Future Outlook - The Children's Place is entering a new chapter focused on stability, profitability, and momentum, with a clear vision for growth [21][22] - The management team is optimistic about early signs of success, particularly in the back-to-school season [22] Conclusion - The Children's Place is committed to a comprehensive transformation strategy aimed at revitalizing its brand, improving financial performance, and enhancing customer engagement [22][38]

The Children's Place (NASDAQ: PLCE ) has experienced rollercoaster price action since I last covered the apparel retailer back in March . During the spring, PLCE stock held up relatively well, as perhaps someAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from S ...

The Children's Place (NASDAQ: PLCE ) has experienced rollercoaster price action since I last covered the apparel retailer back in March . During the spring, PLCE stock held up relatively well, as perhaps someAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from S ...

Group 1: Market Overview - As of September 12, 2025, two stocks in the consumer discretionary sector are showing signs of being overbought, which may concern momentum-focused investors [1][2]. Group 2: GoPro Inc (GPRO) - GoPro reported mixed quarterly results on August 11, 2025, with a year-over-year gross margin improvement to 36.0%, up from 30.7%, and a 32% reduction in operating expenses [7]. - The company's adjusted EBITDA improved by 83%, and its stock gained approximately 59% over the past month, reaching a 52-week high of $2.37 [7]. - GoPro's RSI value is at 78, indicating it is considered overbought, with shares closing at $2.00 after a 22.7% increase [7]. Group 3: Children's Place Inc (PLCE) - Children's Place reported better-than-expected quarterly revenue on September 5, 2025, despite challenges from adverse weather conditions earlier in the quarter [7]. - The company experienced a significant improvement in comparable sales and its stock increased around 69% over the past month, achieving a 52-week high of $19.74 [7]. - The RSI value for Children's Place is 73.6, and shares fell 4.2% to close at $7.33 [7].

Group 1: Market Overview - As of September 12, 2025, two stocks in the consumer discretionary sector are showing signs of being overbought, which may concern momentum-focused investors [1][2]. Group 2: GoPro Inc (GPRO) - GoPro reported mixed quarterly results on August 11, 2025, with a gross margin improvement to 36.0%, up from 30.7% year-over-year, and a 32% reduction in operating expenses [7]. - The company's adjusted EBITDA increased by 83% [7]. - GoPro's stock gained approximately 59% over the past month, reaching a 52-week high of $2.37, with an RSI value of 78 [7]. Group 3: Children's Place Inc (PLCE) - Children's Place exceeded quarterly revenue expectations, with President Muhammad Umair noting strong momentum for the back-to-school season despite previous challenges [7]. - The company experienced a 69% stock gain over the past month, achieving a 52-week high of $19.74, with an RSI value of 73.6 [7]. - However, shares of Children's Place fell by 4.2% to close at $7.33 on Thursday [7].

[FORM 10-Q Filing Details](index=1&type=section&id=FORM%2010-Q) This section details the company's quarterly report filing, including registrant, trading symbol, and filing classifications - The report is a Quarterly Report on Form 10-Q for the period ended **August 2, 2025**[3](index=3&type=chunk) - The registrant is **THE CHILDREN'S PLACE, INC.**, with trading symbol **PLCE** on Nasdaq Global Select Market[3](index=3&type=chunk) - The company is classified as a **Non-accelerated filer** and a **Smaller reporting company**[4](index=4&type=chunk) - As of **September 2, 2025**, **22,167,889** shares of Common Stock, par value **$0.10** per share, were outstanding[4](index=4&type=chunk) [Table of Contents](index=3&type=section&id=TABLE%20OF%20CONTENTS) This section outlines the report's structure, dividing it into financial and other information parts - The report is structured into two main parts: **Part I – Financial Information** and **Part II – Other Information**[7](index=7&type=chunk)[8](index=8&type=chunk) - Part I includes Financial Statements, Management's Discussion and Analysis, Market Risk disclosures, and Controls and Procedures[7](index=7&type=chunk) - Part II covers Legal Proceedings, Risk Factors, Unregistered Sales of Equity Securities, Other Information, and Exhibits[8](index=8&type=chunk) [Part I - Financial Information](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements and management's analysis of financial condition and results [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements%2E) This item presents the unaudited consolidated financial statements of The Children's Place, Inc. and its subsidiaries, including balance sheets, statements of operations, comprehensive loss, changes in stockholders' deficit, cash flows, and extensive notes to these financial statements, providing a detailed view of the company's financial position and performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' deficit at specific dates Consolidated Balance Sheet Highlights (in thousands) | Metric | Aug 2, 2025 (in thousands) | Feb 1, 2025 (in thousands) | Aug 3, 2024 (in thousands) | | :--------------------------------- | :------------------------- | :------------------------- | :------------------------- | | Total Assets | $805,097 | $747,552 | $921,414 | | Total Liabilities | $809,964 | $806,963 | $990,286 | | Total Stockholders' Deficit | $(4,867) | $(59,411) | $(68,872) | | Cash and Cash Equivalents | $7,798 | $5,347 | $9,573 | | Inventories | $442,705 | $399,602 | $520,593 | | Revolving Loan | $294,417 | $245,659 | $316,655 | | Related Party Long-Term Debt | $107,193 | $165,974 | $165,354 | - Total assets decreased by **$116.3 million (12.6%)** from August 3, 2024, to August 2, 2025[11](index=11&type=chunk) - Total liabilities decreased by **$80.3 million (8.1%)** from August 3, 2024, to August 2, 2025[11](index=11&type=chunk) - Stockholders' deficit significantly improved from **$(68.9) million** as of August 3, 2024, to **$(4.9) million** as of August 2, 2025[11](index=11&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the company's financial performance, detailing net sales, gross profit, operating income, and net loss over specific periods Key Operating Results (in thousands, except loss per common share) | Metric | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net sales | $298,006 | $319,655 | $540,131 | $587,533 | | Gross profit | $101,272 | $111,794 | $172,055 | $204,535 | | Operating income (loss) | $4,106 | $(21,776) | $(20,011) | $(49,764) | | Net loss | $(5,365) | $(32,114) | $(39,388) | $(69,909) | | Basic Loss per common share | $(0.24) | $(2.51) | $(1.80) | $(5.49) | | Diluted Loss per common share | $(0.24) | $(2.51) | $(1.80) | $(5.49) | - Net sales decreased by **6.8%** for the 13 weeks and **8.1%** for the 26 weeks ended August 2, 2025, compared to the prior year[13](index=13&type=chunk) - Operating income improved significantly from a loss of **$(21.8) million** to an income of **$4.1 million** for the 13 weeks ended August 2, 2025[13](index=13&type=chunk) - Net loss decreased by **83.3%** for the 13 weeks and **43.7%** for the 26 weeks ended August 2, 2025, compared to the prior year[13](index=13&type=chunk) [Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the company's comprehensive loss, including net loss and other comprehensive income items like foreign currency adjustments Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :--------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net loss | $(5,365) | $(32,114) | $(39,388) | $(69,909) | | Foreign currency translation adjustment | $(1,510) | $(413) | $2,072 | $(739) | | Total comprehensive loss | $(6,875) | $(32,527) | $(37,316) | $(70,648) | - Total comprehensive loss significantly reduced from **$(32.5) million** to **$(6.9) million** for the 13 weeks ended August 2, 2025, compared to the prior year[16](index=16&type=chunk) [Consolidated Statements of Changes in Stockholders' Deficit](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Deficit) This section details the changes in the company's stockholders' deficit, including net loss, stock issuances, and other equity transactions Changes in Stockholders' Deficit (in thousands) | Metric | Balance, May 3, 2025 (in thousands) | Balance, August 2, 2025 (in thousands) | Balance, February 1, 2025 (in thousands) | | :--------------------------------- | :---------------------------------- | :----------------------------------- | :----------------------------------- | | Total Stockholders' Deficit | $1,415 | $(4,867) | $(59,411) | | Net loss (13 weeks) | N/A | $(5,365) | N/A | | Net loss (26 weeks) | N/A | $(39,388) | N/A | | Rights offering stock issuance (26 weeks) | N/A | $90,000 | N/A | - The company completed a Rights Offering on **February 6, 2025**, issuing **9.2 million** shares of Common stock for a total purchase price of **$90.0 million**[21](index=21&type=chunk)[91](index=91&type=chunk) - Mithaq, a controlling stockholder, purchased **6.7 million** shares, paying **$5.1 million** in cash and converting **$60.2 million** of the Initial Mithaq Term Loan[92](index=92&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows (in thousands) | Activity | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :--------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net cash used in operating activities | $(73,436) | $(194,687) | | Net cash used in investing activities | $(4,843) | $(12,478) | | Net cash provided by financing activities | $77,754 | $203,652 | | Net increase (decrease) in cash and cash equivalents | $2,451 | $(4,066) | | Cash and cash equivalents, end of period | $7,798 | $9,573 | - Cash used in operating activities decreased significantly by **$121.2 million (62.2%)** year-over-year, primarily due to a smaller increase in inventory[28](index=28&type=chunk)[181](index=181&type=chunk) - Cash used in investing activities decreased by **$7.6 million (61.2%)** year-over-year, driven by lower capital expenditures[28](index=28&type=chunk)[182](index=182&type=chunk) - Net cash provided by financing activities decreased by **$125.9 million (61.8%)** year-over-year, influenced by prior year Mithaq Term Loan proceeds and current year Rights Offering[28](index=28&type=chunk)[183](index=183&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements [Note 1. Basis of Presentation](index=13&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note describes the company's business as a specialty children's retailer, its omni-channel model, proprietary brands, and global network. It also outlines the basis for preparing the unaudited consolidated financial statements, key definitions, fiscal year, use of estimates, and recent accounting standard updates - The Children's Place, Inc. is the largest pure-play children's specialty retailer in North America, operating an omni-channel, digital-first model under proprietary brands like **'The Children's Place'**, **'Gymboree'**, **'Sugar & Jade'**, and **'PJ Place'**[30](index=30&type=chunk)[136](index=136&type=chunk) - The company's global network includes two digital storefronts, **494** stores in North America, wholesale marketplaces, and **229** international points of distribution in **12** countries[30](index=30&type=chunk)[136](index=136&type=chunk) - The business is classified into two segments: **The Children's Place U.S.** (U.S. and Puerto Rico stores, U.S. wholesale) and **The Children's Place International** (Canadian stores, international franchisees)[31](index=31&type=chunk)[137](index=137&type=chunk) - The company adopted **ASU 2023-07** retrospectively, expanding disclosures without a material impact on financial statements, and is evaluating **ASU 2023-09** and **ASU 2024-03** for future impacts[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 2. Revenues](index=15&type=section&id=2.%20REVENUES) This note details the company's revenue recognition policies, including disaggregation of net sales by geography, and explains how revenue is recognized for retail, e-commerce, wholesale, private label credit card programs, loyalty programs, gift cards, and international franchisee sales Net Sales Disaggregated by Geography (in thousands) | Geography | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | South | $116,383 | $125,639 | $202,040 | $228,895 | | Northeast | $47,156 | $50,453 | $93,010 | $104,680 | | West | $34,954 | $38,837 | $62,695 | $72,753 | | Midwest | $25,905 | $27,953 | $51,825 | $60,491 | | International and other | $73,608 | $76,773 | $130,561 | $120,714 | | **Total Net Sales** | **$298,006** | **$319,655** | **$540,131** | **$587,533** | - Revenue is recognized when control of promised goods or services is transferred to customers, net of coupon redemptions and anticipated sales returns[44](index=44&type=chunk)[45](index=45&type=chunk) - Contract liabilities related to the points-based customer loyalty program were **$6.0 million** as of August 2, 2025, up from **$3.6 million** as of August 3, 2024[52](index=52&type=chunk) - The gift card liability balance was **$4.3 million** as of August 2, 2025, down from **$6.4 million** as of August 3, 2024[53](index=53&type=chunk) [Note 3. Intangible Assets](index=17&type=section&id=3.%20INTANGIBLE%20ASSETS) This note details the company's intangible assets, primarily the Gymboree tradename, and discusses impairment assessments, noting no impairment in the current period but a significant charge in the prior year Intangible Assets (in thousands) | Asset | Useful Life | Gross Amount (Aug 2, 2025, in thousands) | Accumulated Amortization (Aug 2, 2025, in thousands) | Net Amount (Aug 2, 2025, in thousands) | | :---------------- | :---------- | :--------------------------------------- | :--------------------------------------------- | :------------------------------------- | | Gymboree tradename | Indefinite | $13,000 | $— | $13,000 | - No indicators of impairment were identified for intangible assets in the Second Quarter 2025 and Year-To-Date 2025[56](index=56&type=chunk)[110](index=110&type=chunk) - A **$28.0 million** impairment charge on the Gymboree tradename was recorded during the Second Quarter 2024, reducing its carrying value to **$13.0 million**[56](index=56&type=chunk)[110](index=110&type=chunk) [Note 4. Property and Equipment, Net](index=17&type=section&id=4.%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) This note provides a breakdown of the company's property and equipment, net of accumulated depreciation and amortization, and confirms no asset impairment charges were recorded in the current periods Property and Equipment, Net (in thousands) | Asset Category | Aug 2, 2025 (in thousands) | Feb 1, 2025 (in thousands) | Aug 3, 2024 (in thousands) | | :----------------------------- | :------------------------- | :------------------------- | :------------------------- | | Land and land improvements | $3,403 | $3,403 | $3,403 | | Building and improvements | $36,209 | $36,527 | $36,309 | | Material handling equipment | $84,761 | $88,092 | $89,427 | | Leasehold improvements | $162,599 | $159,992 | $164,054 | | Store fixtures and equipment | $151,551 | $151,810 | $164,795 | | Capitalized software | $229,404 | $228,227 | $335,762 | | Construction in progress | $4,850 | $1,647 | $5,992 | | **Total Property and equipment, net** | **$89,445** | **$97,487** | **$111,296** | - Property and equipment, net, decreased by **$21.8 million (19.6%)** from August 3, 2024, to August 2, 2025[57](index=57&type=chunk) - The company did not record asset impairment charges in the Second Quarter 2025 and Year-To-Date 2025[58](index=58&type=chunk)[108](index=108&type=chunk) [Note 5. Leases](index=18&type=section&id=5.%20LEASES) This note describes the company's operating leases for retail stores, offices, and equipment, providing details on lease terms, expense components, weighted-average remaining lease term, discount rate, and maturities of lease liabilities Operating Lease Expense Components (in thousands) | Lease Cost Type | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Fixed operating lease cost | $21,343 | $23,139 | $42,542 | $45,641 | | Variable operating lease cost | $4,322 | $6,098 | $10,081 | $13,944 | | **Total operating lease cost** | **$25,665** | **$29,237** | **$52,623** | **$59,585** | - The weighted-average remaining lease term for operating leases was **4.4 years** as of August 2, 2025[60](index=60&type=chunk) - The weighted-average discount rate used to calculate operating lease liabilities was **8.6%** as of August 2, 2025[60](index=60&type=chunk) - The present value of operating lease liabilities was **$164.5 million** as of August 2, 2025[60](index=60&type=chunk) [Note 6. Debt](index=19&type=section&id=6.%20DEBT) This note provides comprehensive details on the company's debt, including the $433.0 million ABL Credit Facility and the Mithaq Term Loans ($78.6 million Initial and $90.0 million New), outlining their terms, interest rates, covenants, and maturity schedules. It also mentions the $40.0 million Mithaq Credit Facility, which has not yet been drawn - The company maintains a **$433.0 million** ABL Credit Facility maturing in **November 2026**, with **$294.4 million** outstanding borrowings and **$43.8 million** availability as of August 2, 2025[62](index=62&type=chunk)[74](index=74&type=chunk) - ABL Credit Facility interest expense was **$5.4 million** for Q2 2025 (down from **$6.3 million** in Q2 2024) and **$10.2 million** for YTD 2025 (down from **$12.0 million** in YTD 2024)[67](index=67&type=chunk) - Mithaq Term Loans include an Initial **$78.6 million** (interest-free, **$18.4 million** outstanding after **$60.2 million** repayment) and a New **$90.0 million** (SOFR + **4.000%** per annum), both maturing in **2027**[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[85](index=85&type=chunk) - Related party interest expense was **$1.9 million** for Q2 2025 (down from **$2.1 million** in Q2 2024) and **$3.7 million** for YTD 2025 (up from **$2.5 million** in YTD 2024)[78](index=78&type=chunk) - A **$40.0 million** Mithaq Credit Facility is available, with the deadline for advances extended to **July 1, 2027**; no debt has been incurred under this facility as of August 2, 2025[86](index=86&type=chunk)[87](index=87&type=chunk) [Note 7. Commitments and Contingencies](index=22&type=section&id=7.%20COMMITMENTS%20AND%20CONTINGENCIES) This note discusses legal proceedings, specifically a purported class action lawsuit (Gabriela Gonzalez v. The Children's Place, Inc.) regarding false advertising, and states that any ultimate liability from this or other normal course legal proceedings is not expected to have a material adverse effect on the company's financial position - The company is a defendant in a purported class action lawsuit, **Gabriela Gonzalez v. The Children's Place, Inc.**, alleging false advertising[89](index=89&type=chunk) - The case has involved motions to compel arbitration, mass arbitration demands, and a denied motion to dismiss in **November 2024**[89](index=89&type=chunk) - Management believes any ultimate liability from these proceedings is not expected to have a material adverse effect on the company's financial position, results of operations, or cash flows[89](index=89&type=chunk)[90](index=90&type=chunk) [Note 8. Stockholders' Deficit](index=22&type=section&id=8.%20STOCKHOLDERS%27%20DEFICIT) This note details changes in stockholders' deficit, including the completion of a Rights Offering that significantly increased common stock and paid down debt, and provides an update on the share repurchase program and dividend policy - A Rights Offering was completed on **February 6, 2025**, resulting in the issuance of **9.2 million** shares of Common stock for **$90.0 million**[91](index=91&type=chunk) - Mithaq, a controlling stockholder, purchased **6.7 million** shares through the Rights Offering, now owning **62%** of outstanding common stock, and used **$60.2 million** of the Initial Mithaq Term Loan for payment[92](index=92&type=chunk) - The **$250.0 million** Share Repurchase Program, authorized in **November 2021**, has **$156.1 million** remaining availability as of August 2, 2025, but repurchases are restricted by credit agreement covenants, except for tax withholding related repurchases[94](index=94&type=chunk) - The company has no current plans to pay regular cash dividends in Fiscal 2025 due to terms of its Credit Agreement[97](index=97&type=chunk) [Note 9. Stock-Based Compensation](index=24&type=section&id=9.%20STOCK-BASED%20COMPENSATION) This note summarizes the company's stock-based compensation expense for Deferred Awards and Performance Awards, noting a significant decrease in total expense for the current periods compared to the prior year, partly due to a change of control in Fiscal 2024 Stock-Based Compensation Expense (in thousands) | Award Type | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :----------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Deferred Awards | $467 | $(589) | $1,706 | $1,829 | | Performance Awards | $464 | $(659) | $971 | $9,532 | | **Total** | **$931** | **$(1,248)** | **$2,677** | **$11,361** | - A change of control in Fiscal 2024 triggered the conversion of outstanding Performance Awards, resulting in **$9.9 million** incremental expense in Year-To-Date 2024[100](index=100&type=chunk) [Note 10. Loss Per Common Share](index=24&type=section&id=10.%20LOSS%20PER%20COMMON%20SHARE) This note provides the calculation of basic and diluted loss per common share, including the retroactive adjustment due to the Rights Offering's bonus element Loss Per Common Share (in thousands, except EPS) | Metric | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net loss | $(5,365) | $(32,114) | $(39,388) | $(69,909) | | Basic weighted average common shares outstanding | 22,142 | 12,793 | 21,885 | 12,729 | | Diluted weighted average common shares outstanding | 22,142 | 12,793 | 21,885 | 12,729 | | Basic Loss per common share | $(0.24) | $(2.51) | $(1.80) | $(5.49) | | Diluted Loss per common share | $(0.24) | $(2.51) | $(1.80) | $(5.49) | - Weighted average common shares outstanding and basic/diluted loss per share were retroactively adjusted for all prior periods due to the Rights Offering's bonus element[101](index=101&type=chunk) [Note 11. Fair Value Measurement](index=25&type=section&id=11.%20FAIR%20VALUE%20MEASUREMENT) This note discusses the fair value measurement of financial and non-financial assets, categorizing them into Level 1, 2, or 3 of the fair value hierarchy, and details impairment assessments for long-lived and indefinite-lived intangible assets - Cash and cash equivalents are classified as **Level 1** in the fair value hierarchy[104](index=104&type=chunk) - The Mithaq Term Loans are classified as **Level 2**, with fair values of approximately **$15.1 million** for the Initial Term Loan (carrying value **$18.4 million**) and **$82.8 million** for the New Term Loan (carrying value **$90.0 million**) as of August 2, 2025[105](index=105&type=chunk) - No impairment charges were recorded for long-lived assets in Q2 2025 or YTD 2025, and no impairment indicators were identified for the Gymboree tradename in these periods, following a **$28.0 million** charge in Q2 2024[108](index=108&type=chunk)[110](index=110&type=chunk) [Note 12. Income Taxes](index=25&type=section&id=12.%20INCOME%20TAXES) This note explains the company's accounting for income taxes using the asset and liability method, details the provision for income taxes and effective tax rates, and discusses the impact of the CARES Act, unrecognized tax benefits, and recent tax legislation Provision for Income Taxes and Effective Tax Rate (in thousands) | Metric | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Provision for income taxes | $1,453 | $1,107 | $2,797 | $3,193 | | Effective tax rate | (37.1)% | (3.6)% | (7.6)% | (4.8)% | - The change in the effective tax rate is primarily due to the absence of the Gymboree tradename impairment charge in Fiscal 2024[112](index=112&type=chunk)[113](index=113&type=chunk) - A remaining income tax receivable of **$19.1 million** as of August 2, 2025, is included in Prepaid expenses and other current assets, resulting from the CARES Act's NOL carryback[115](index=115&type=chunk) - Total unrecognized tax benefits amounted to **$6.7 million** as of August 2, 2025[116](index=116&type=chunk) - The **One Big Beautiful Bill Act** (**July 4, 2025**) is not expected to materially impact the estimated annual effective tax rate or financial statements for Q2 2025, with effects for fiscal year 2026 being evaluated[119](index=119&type=chunk) [Note 13. Segment Information](index=26&type=section&id=13.%20SEGMENT%20INFORMATION) This note provides financial information disaggregated by the company's two reportable segments: The Children's Place U.S. and The Children's Place International, including net sales, operating income/loss, store counts, depreciation, and capital expenditures. It also identifies a major U.S. wholesale customer - The company reports segment data based on geography: **The Children's Place U.S.** and **The Children's Place International**[121](index=121&type=chunk)[137](index=137&type=chunk) - As of August 2, 2025, The Children's Place U.S. had **437** stores (down from **452** YoY) and The Children's Place International had **57** stores (down from **63** YoY)[124](index=124&type=chunk) Segment Net Sales (in thousands) | Segment | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :--------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | The Children's Place U.S. | $273,187 | $292,393 | $494,954 | $538,581 | | The Children's Place International | $24,819 | $27,262 | $45,177 | $48,952 | | **Total Net Sales** | **$298,006** | **$319,655** | **$540,131** | **$587,533** | Segment Operating Income (Loss) (in thousands) | Segment | 13 Weeks Ended Aug 2, 2025 (in thousands) | 13 Weeks Ended Aug 3, 2024 (in thousands) | 26 Weeks Ended Aug 2, 2025 (in thousands) | 26 Weeks Ended Aug 3, 2024 (in thousands) | | :--------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | The Children's Place U.S. | $6,284 | $(19,673) | $(13,431) | $(43,652) | | The Children's Place International | $(2,178) | $(2,103) | $(6,580) | $(6,112) | | **Total Segment Operating Income (Loss)** | **$4,106** | **$(21,776)** | **$(20,011)** | **$(49,764)** | - One U.S. wholesale customer accounted for more than **10%** of net sales (**$42.3 million** in Q2 2025, **$74.5 million** YTD 2025) and a majority of accounts receivable (**$31.8 million** as of Aug 2, 2025)[122](index=122&type=chunk) - Total capital expenditures were **$4.8 million** YTD 2025, down from **$12.5 million** YTD 2024[129](index=129&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS%2E) This section provides management's perspective on the company's financial performance and condition, discussing business overview, recent developments, and detailed analysis of results of operations, liquidity, capital resources, and critical accounting estimates [Overview](index=32&type=section&id=OVERVIEW) This section provides an overview of the company's business, recent developments, and the macroeconomic environment impacting its operations - Macroeconomic conditions, including inflationary pressures, higher interest rates, and tariffs, adversely affected consumer discretionary apparel purchases in Q2 2025[138](index=138&type=chunk) - The company is implementing a long-range plan to streamline operations, aiming for over **$40 million** in benefits over three years by reducing corporate office costs, optimizing distribution, and right-sizing non-merchandise and third-party spend[141](index=141&type=chunk) - The company is monitoring tariffs and benefiting from diversified sourcing strategies, with no single country representing more than **20%** of total sourcing capacity and limited exposure to China[139](index=139&type=chunk) - The implementation of **OECD Pillar Two** global minimum corporate tax rules in Hong Kong and Canada is not expected to have a material impact on the effective tax rate[142](index=142&type=chunk) [Results of Operations](index=33&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, detailing changes in net sales, gross profit, operating income, and net loss Second Quarter 2025 vs. Second Quarter 2024 Financial Highlights (in thousands, except percentages) | Metric | Aug 2, 2025 (in thousands) | Aug 3, 2024 (in thousands) | Change ($ in thousands) | Change (%) | Change (bps) | | :----------------------------------------- | :------------------------- | :------------------------- | :---------------------- | :--------- | :----------- | | Net sales | $298,006 | $319,655 | $(21,649) | (6.8)% | — | | Gross profit | $101,272 | $111,794 | $(10,522) | (9.4)% | (100) | | Gross margin | 34.0% | 35.0% | N/A | N/A | (100) | | SG&A expenses | $89,596 | $96,065 | $6,469 | 6.7% | — | | Operating income (loss) | $4,106 | $(21,776) | $25,882 | 118.9% | 820 | | Net loss | $(5,365) | $(32,114) | $26,749 | 83.3% | 820 | | Basic Loss per common share | $(0.24) | $(2.51) | N/A | N/A | N/A | - Net sales decreased by **6.8%** in Q2 2025, driven by lower brick-and-mortar and e-commerce traffic and conversion, with comparable retail sales down **4.7%**[146](index=146&type=chunk) - Operating income improved significantly to **$4.1 million** in Q2 2025 from a loss of **$(21.8) million** in Q2 2024, primarily due to the absence of a **$28.0 million** asset impairment charge on the Gymboree tradename[151](index=151&type=chunk)[152](index=152&type=chunk) Year-To-Date 2025 vs. Year-To-Date 2024 Financial Highlights (in thousands, except percentages) | Metric | Aug 2, 2025 (in thousands) | Aug 3, 2024 (in thousands) | Change ($ in thousands) | Change (%) | Change (bps) | | :----------------------------------------- | :------------------------- | :------------------------- | :---------------------- | :--------- | :----------- | | Net sales | $540,131 | $587,533 | $(47,402) | (8.1)% | — | | Gross profit | $172,055 | $204,535 | $(32,480) | (15.9)% | (290) | | Gross margin | 31.9% | 34.8% | N/A | N/A | (290) | | SG&A expenses | $176,266 | $205,159 | $28,893 | 14.1% | 230 | | Operating loss | $(20,011) | $(49,764) | $29,753 | 59.8% | 480 | | Net loss | $(39,388) | $(69,909) | $30,521 | 43.7% | 460 | | Basic Loss per common share | $(1.80) | $(5.49) | N/A | N/A | N/A | - Year-To-Date net sales decreased by **8.1%**, with comparable retail sales down **8.9%**, partially offset by an increase in wholesale revenue[161](index=161&type=chunk) - Year-To-Date operating loss improved to **$(20.0) million** from **$(49.8) million**, largely due to reduced one-time costs and the absence of the Gymboree tradename impairment charge from the prior year[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's ability to generate and manage cash, including working capital, debt, and future capital requirements - Working capital deficit decreased by **$31.1 million** to **$40.0 million** as of August 2, 2025, compared to August 3, 2024, reflecting reduced accounts payable and inventory[177](index=177&type=chunk) - Total liquidity as of August 2, 2025, was **$91.6 million**, including **$43.8 million** ABL availability, **$40.0 million** Mithaq Credit Facility availability (undrawn), and **$7.8 million** cash on hand[178](index=178&type=chunk) - Cash used in operating activities decreased significantly to **$73.4 million** in YTD 2025 from **$194.7 million** in YTD 2024, primarily due to improved inventory management[181](index=181&type=chunk) - Inventories decreased by **$77.9 million (15.0%)** year-over-year to **$442.7 million** as of August 2, 2025, due to improved inventory management and alignment with growth strategy[186](index=186&type=chunk) - Accounts payable decreased by **$83.4 million (38.6%)** year-over-year to **$132.4 million** as of August 2, 2025, primarily due to lower inventory purchases and paying down past due vendors[187](index=187&type=chunk) - The company expects to meet its working capital and capital expenditure requirements for at least the next twelve months using cash on hand, cash flows from operations, and available borrowings under its ABL Credit Facility and Mithaq Credit Facility[179](index=179&type=chunk)[184](index=184&type=chunk) [Significant Accounting Policies and Critical Accounting Estimates](index=44&type=section&id=SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20CRITICAL%20ACCOUNTING%20ESTIMATES) This section outlines the company's key accounting policies and critical estimates used in preparing its financial statements - There have been no significant changes in the company's accounting policies from those described in its most recent Annual Report on Form 10-K[210](index=210&type=chunk) - Critical accounting estimates, including impairment of long-lived assets, indefinite-lived intangible assets, income taxes, stock-based compensation, and inventory valuation, have not materially changed from the most recent Annual Report on Form 10-K[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK%2E) This item discusses the company's exposure to market risks, primarily related to interest rate movements on borrowings and investments, and currency rate movements on non-U.S. dollar denominated assets and liabilities, concluding that a 10% change in interest or exchange rates would not have a material impact on interest expense or transaction gains/losses - The company is routinely subject to market risk from interest rate movements on borrowings (ABL Credit Facility, Mithaq Term Loans) and currency rate movements on non-U.S. dollar denominated assets and liabilities (Canadian and Hong Kong dollars)[215](index=215&type=chunk)[220](index=220&type=chunk)[224](index=224&type=chunk) - A **10%** change in the prime rate or SOFR would not have a material impact on the company's interest expense for its ABL Credit Facility or Mithaq Term Loans[217](index=217&type=chunk)[218](index=218&type=chunk) - A **10%** increase or decrease in Canadian and Hong Kong foreign currency exchange rates would increase or decrease the corresponding net investment by **$1.6 million**, but would not result in a significant transaction gain or loss in earnings[220](index=220&type=chunk)[224](index=224&type=chunk) - As of August 2, 2025, **$3.5 million** of cash and cash equivalents were held in foreign subsidiaries, primarily in India, China, Canada, Mauritius, and Hong Kong[221](index=221&type=chunk) - The company imports a vast majority of merchandise from foreign countries, exposing it to political, foreign trade, financial, banking, currency policies, and labor unrest risks[225](index=225&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES%2E) This item reports on the effectiveness of the company's disclosure controls and procedures, concluding they were effective at a reasonable assurance level as of August 2, 2025, and states there were no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of **August 2, 2025**[228](index=228&type=chunk) - There have been no changes in internal control over financial reporting during the quarter ended August 2, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[229](index=229&type=chunk) [Part II - Other Information](index=48&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This part provides additional non-financial and other disclosures not covered in the financial information section [Item 1. Legal Proceedings](index=48&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS%2E) This item refers to Note 7 of the consolidated financial statements for details on legal proceedings, indicating no new material information beyond what is already disclosed - Information regarding legal proceedings is discussed in **'Note 7. Commitments and Contingencies'** to the consolidated financial statements[232](index=232&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=ITEM%201A.%20RISK%20FACTORS%2E) This item states that there were no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025 - There were no material changes to the risk factors disclosed in Item 1A of Part I in the Annual Report on Form 10-K for the fiscal year ended **February 1, 2025**[233](index=233&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS%2E) This item provides an update on the company's share repurchase program, including remaining availability and details of share repurchase activity during the second quarter, primarily related to tax withholdings for stock awards - The **$250.0 million** Share Repurchase Program, authorized in **November 2021**, has **$156.1 million** remaining availability as of August 2, 2025[234](index=234&type=chunk) - Repurchases are subject to heightened payment conditions under the Credit Agreement, except for shares withheld to cover taxes in conjunction with the vesting of stock awards[234](index=234&type=chunk)[235](index=235&type=chunk) Share Repurchase Activity During Second Quarter 2025 | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value (in thousands) of Shares that May Yet Be Purchased Under the Plans or Programs | | :--------------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :------------------------------------------------------------------------------------------------- | | May 4, 2025 through May 31, 2025 | 56,280 | $6.00 | 337,421 | $156,127 | | June 1, 2025 through July 5, 2025 | — | — | — | $156,127 | | July 6, 2025 through August 2, 2025 | — | — | — | $156,127 | | **Total** | **56,280** | **$6.00** | **337,421** | **N/A** | [Item 5. Other Information](index=48&type=section&id=ITEM%205.%20OTHER%20INFORMATION%2E) This item states that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the Second Quarter 2025 - No directors or officers adopted or terminated a **'Rule 10b5-1 trading arrangement'** or a **'non-Rule 10b5-1 trading arrangement'** during the Second Quarter 2025[237](index=237&type=chunk) [Item 6. Exhibits](index=49&type=section&id=ITEM%206.%20EXHIBITS%2E) This item lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including amendments to credit facilities, stock award agreements, and certifications - Exhibits filed include Amendment No. 2 to Commitment Letter for the **$40 Million Senior Unsecured Credit Facility**, forms of Deferred Cash Award, Performance-Based Cash Award, and Restricted Stock Unit Award Agreements, and Section 302 and 906 certifications[239](index=239&type=chunk) [Signatures](index=50&type=section&id=SIGNATURES) This section formally certifies the accuracy and completeness of the quarterly report by authorized officers - The report was signed by **Muhammad Umair**, President and Interim Chief Executive Officer, and **John Szczepanski**, Chief Financial Officer, on **September 5, 2025**[243](index=243&type=chunk)

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) The company ended Q2 FY2025 with strong back-to-school momentum, achieving positive comparable sales growth in its direct-to-consumer business and reducing inventory by $78 million - The company showed strong momentum during the back-to-school season, achieving **positive comparable sales growth** in its owned direct-to-consumer business in July for the first time in 18 months[3](index=3&type=chunk) - Inventory position improved, decreasing by **$78 million** year-over-year, prioritizing working capital and free cash flow management[3](index=3&type=chunk) [Company Announces Transformation Initiative](index=1&type=section&id=Company%20Announces%20Transformation%20Initiative) The company announced a long-term transformation plan to generate over $40 million in benefits over three years by optimizing costs and shifting its store strategy from closures to openings - The company will implement a long-term plan aimed at generating over **$40 million** in total benefits over the next three years by cutting unnecessary corporate office costs, optimizing the distribution network, and adjusting non-merchandise and third-party spending[4](index=4&type=chunk) - Transformation efforts include a review of the corporate cost structure, with plans to reduce the corporate payroll run rate from over **$120 million** at the beginning of fiscal 2023 to below **$80 million** in fiscal 2026[4](index=4&type=chunk) - The strategic focus is shifting from closing stores to opening them to revitalize the store look, feel, and customer experience, with a new loyalty program planned for launch in the third quarter to enhance customer retention and lifetime value[4](index=4&type=chunk) [Tariff Update](index=2&type=section&id=Tariff%20Update) The company anticipates $20 to $25 million in additional tariffs for fiscal 2025 but has mitigation plans to offset approximately 80% of the impact - An estimated **$20 million to $25 million** in additional tariffs and taxes are expected in fiscal 2025[5](index=5&type=chunk) - The company plans to offset approximately **80%** of the tariff impact through diversified sourcing strategies, strong vendor partnerships, and improved inbound ocean freight rates[5](index=5&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) In Q2 FY2025, net sales and gross profit declined, but operating results turned profitable and net loss narrowed significantly, largely due to a prior-year impairment charge Second Quarter Fiscal 2025 Key Financial Data (GAAP) | Metric | August 2, 2025 (USD in thousands) | August 3, 2024 (USD in thousands) | Change (USD in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 298,006 | 319,655 | (21,649) | -6.8% | | Gross Profit | 101,272 | 111,794 | (10,522) | -9.4% | | Operating Income (Loss) | 4,106 | (21,776) | 25,882 | 118.9% | | Net Loss | (5,365) | (32,114) | 26,749 | -83.3% | | Diluted Loss Per Share | (0.24) | (2.51) | 2.27 | -90.4% | [Net Sales](index=2&type=section&id=Net%20Sales_Q2) Q2 net sales decreased 6.8% year-over-year to $298 million, driven by fewer stores and declines in traffic and e-commerce, with comparable retail sales down 4.7% - Net sales decreased by **$21.7 million**, or **6.8%**, to **$298 million**, primarily due to a lower store count, decreased foot traffic, and a decline in e-commerce sales[6](index=6&type=chunk) - Comparable retail sales decreased by **4.7%** for the quarter[6](index=6&type=chunk) [Gross Profit](index=2&type=section&id=Gross%20Profit_Q2) Gross profit fell by $10.5 million to $101.3 million, with gross margin declining 100 basis points to 34.0% due to inventory adjustments and channel mix shifts - Gross profit decreased by **$10.5 million** to **$101.3 million**[7](index=7&type=chunk) - Gross margin decreased by **100 basis points** to **34.0%** (compared to 35.0% last year), mainly impacted by adjustments related to lower inventory balances and channel mix shifts, partially offset by favorable product margins[7](index=7&type=chunk) [Selling, General, and Administrative Expenses (SG&A)](index=2&type=section&id=Selling,%20General,%20and%20Administrative%20Expenses%20(SG&A)_Q2) SG&A expenses decreased to $89.6 million, primarily due to lower one-time restructuring costs compared to the prior year, with adjusted SG&A at 29.4% of net sales - SG&A expenses were **$89.6 million**, down from **$96.1 million** last year, primarily due to a reduction in one-time restructuring costs from the prior year, partially offset by increased marketing expenses[8](index=8&type=chunk) - Adjusted SG&A was **$87.6 million**, representing **29.4%** of net sales, compared to **$88.3 million** last year[8](index=8&type=chunk) [Operating Income (Loss)](index=2&type=section&id=Operating%20Income%20(Loss)_Q2) Operating income was $4.1 million, a significant turnaround from a $21.8 million loss last year, which included a $28 million trademark impairment charge - Operating income was **$4.1 million**, compared to an operating loss of **$21.8 million** last year, which included a **$28 million** impairment charge for the Gymboree trademark[9](index=9&type=chunk) - Adjusted operating income was **$6.1 million**, down from **$14.2 million** last year[9](index=9&type=chunk) [Net Interest Expense](index=2&type=section&id=Net%20Interest%20Expense_Q2) Net interest expense declined to $8.0 million, driven by lower average borrowings and a reduced average interest rate on the revolving credit facility - Net interest expense was **$8.0 million**, down from **$9.2 million** last year, due to lower average borrowings and a lower average interest rate on the revolving credit facility[10](index=10&type=chunk) [Provision for Income Taxes](index=2&type=section&id=Provision%20for%20Income%20Taxes_Q2) The provision for income taxes was $1.5 million as the company adjusts its valuation allowance based on ongoing operating performance - The provision for income taxes was **$1.5 million**, compared to **$1.1 million** last year[11](index=11&type=chunk) [Net Loss and EPS](index=2&type=section&id=Net%20Loss%20and%20EPS_Q2) Net loss significantly narrowed to $5.4 million, or $0.24 per diluted share, compared to a $32.1 million loss, or $2.51 per share, in the prior year - Net loss was **$5.4 million**, with a diluted loss per share of **$0.24**, a significant improvement from a net loss of **$32.1 million** and **$2.51** per share last year[12](index=12&type=chunk) - Adjusted net loss was **$3.4 million**, with an adjusted diluted loss per share of **$0.15**, compared to an adjusted net income of **$3.9 million** and **$0.30** per share last year[12](index=12&type=chunk) [Fiscal Year-To-Date 2025 Financial Performance](index=3&type=section&id=Fiscal%20Year-To-Date%202025%20Financial%20Performance) Year-to-date, the company's net sales and gross profit decreased, while operating and net losses narrowed on a GAAP basis but widened on an adjusted basis Fiscal Year-To-Date 2025 Key Financial Data (GAAP) | Metric | August 2, 2025 (USD in thousands) | August 3, 2024 (USD in thousands) | Change (USD in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 540,131 | 587,533 | (47,402) | -8.1% | | Gross Profit | 172,055 | 204,535 | (32,480) | -15.9% | | Operating Loss | (20,011) | (49,764) | 29,753 | -59.8% | | Net Loss | (39,388) | (69,909) | 30,521 | -43.7% | | Diluted Loss Per Share | (1.80) | (5.49) | 3.69 | -67.2% | [Net Sales](index=3&type=section&id=Net%20Sales_YTD) Year-to-date net sales declined 8.1% to $540.1 million, primarily from lower e-commerce and retail store sales, with comparable retail sales down 8.9% - Year-to-date net sales decreased by **$47.4 million**, or **8.1%**, to **$540.1 million**, mainly due to lower e-commerce sales and reduced store count and volume, partially offset by increased wholesale revenue[13](index=13&type=chunk) - Comparable retail sales decreased by **8.9%**[13](index=13&type=chunk) [Gross Profit](index=3&type=section&id=Gross%20Profit_YTD) Year-to-date gross profit fell by $32.5 million to $172.1 million, with gross margin down 290 basis points to 31.9% due to inventory adjustments and channel mix shifts - Gross profit decreased by **$32.5 million** to **$172.1 million**[14](index=14&type=chunk) - Gross margin decreased by **290 basis points** to **31.9%** (compared to 34.8% last year), mainly impacted by adjustments related to lower inventory balances and channel mix shifts from higher wholesale penetration[14](index=14&type=chunk) [Selling, General, and Administrative Expenses (SG&A)](index=3&type=section&id=Selling,%20General,%20and%20Administrative%20Expenses%20(SG&A)_YTD) Year-to-date SG&A expenses decreased to $176.3 million, primarily due to the absence of prior-year one-time costs related to a change in control and a terminated financing transaction - SG&A expenses were **$176.3 million**, down from **$205.2 million** last year, primarily due to the absence of one-time costs in the prior year related to a change in control and a terminated financing transaction[15](index=15&type=chunk) - Adjusted SG&A was **$174.2 million**, representing **32.2%** of net sales, compared to **$177.0 million** last year[15](index=15&type=chunk) [Operating Loss](index=3&type=section&id=Operating%20Loss_YTD) The year-to-date operating loss narrowed to $20.0 million from $49.8 million last year, while the adjusted operating result shifted from income to a loss of $17.9 million - The operating loss was **$20.0 million**, narrowing from **$49.8 million** last year[16](index=16&type=chunk) - The adjusted operating loss was **$17.9 million**, compared to an adjusted operating income of **$9.2 million** last year[16](index=16&type=chunk) [Net Interest Expense](index=3&type=section&id=Net%20Interest%20Expense_YTD) Year-to-date net interest expense was $16.6 million, slightly lower than the prior year's $17.0 million, mainly due to a lower average interest rate on the revolving credit facility - Net interest expense was **$16.6 million**, down from **$17.0 million** last year, primarily due to a lower average interest rate on the revolving credit facility, partially offset by the write-off of deferred financing costs related to the partial repayment of the Mithaq Tranche 1 Term Loan[17](index=17&type=chunk) [Provision for Income Taxes](index=3&type=section&id=Provision%20for%20Income%20Taxes_YTD) The year-to-date provision for income taxes was $2.8 million as the company adjusts its valuation allowance based on ongoing operating performance - The provision for income taxes was **$2.8 million**, compared to **$3.2 million** last year[18](index=18&type=chunk) [Net Loss and EPS](index=3&type=section&id=Net%20Loss%20and%20EPS_YTD) The year-to-date net loss narrowed to $39.4 million, or $1.80 per diluted share, from $69.9 million, or $5.49 per share, in the prior year - Net loss was **$39.4 million**, with a diluted loss per share of **$1.80**, an improvement from a net loss of **$69.9 million** and **$5.49** per share last year[19](index=19&type=chunk) - Adjusted net loss was **$36.3 million**, with an adjusted diluted loss per share of **$1.66**, compared to **$11.0 million** and **$0.86** per share last year[19](index=19&type=chunk) [Store Update](index=3&type=section&id=Store%20Update) The company ended the second quarter with 494 stores, a net decrease of one store during the quarter and 21 stores year-over-year - The company opened 1 store and closed 2 stores in the second quarter, ending with a total of 494 stores[20](index=20&type=chunk) - The store count was 515 at the end of the second quarter of fiscal 2024, representing a year-over-year decrease of 21 stores[20](index=20&type=chunk) [Balance Sheet and Cash Flow](index=3&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) As of August 2, 2025, the company had total liquidity of $91.6 million, and inventory levels decreased year-over-year, reflecting improved inventory management Liquidity Position | Metric | Amount (USD in millions) | | :--- | :--- | | Cash and cash equivalents | 7.8 | | Availability on revolving credit facility | 43.8 | | Availability under Mithaq commitment letter | 40.0 | | **Total Liquidity** | **91.6** | - As of August 2, 2025, inventory was **$442.7 million**, a decrease from **$520.6 million** on August 3, 2024, reflecting improved inventory management[22](index=22&type=chunk) - Year-to-date, cash used in operating activities was **$73.4 million**[21](index=21&type=chunk) [Non-GAAP Financial Information](index=4&type=section&id=Non-GAAP%20Financial%20Information) [Non-GAAP Reconciliation Overview](index=4&type=section&id=Non-GAAP%20Reconciliation%20Overview) The company reports financial performance on both a GAAP and an adjusted, non-GAAP basis to help investors compare core business performance across periods - The company's reported results include both GAAP and adjusted, non-GAAP figures[23](index=23&type=chunk) - Non-GAAP measures are intended to exclude income and expense items not indicative of core business performance, facilitating comparison of the company's past and current results[23](index=23&type=chunk) [Adjusted Net Income (Loss) Reconciliation](index=7&type=section&id=Adjusted%20Net%20Income%20(Loss)%20Reconciliation) This section provides a reconciliation from GAAP net loss to adjusted net income (loss), detailing non-GAAP adjustments for Q2 and year-to-date periods Adjusted Net Income (Loss) Reconciliation (USD in thousands, except per share data) | Metric | Q2 August 2, 2025 | Q2 August 3, 2024 | YTD August 2, 2025 | YTD August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Net Loss | (5,365) | (32,114) | (39,388) | (69,909) | | Total Non-GAAP Adjustments | 1,961 | 36,007 | 3,138 | 58,914 | | Adjusted Net Income (Loss) | (3,404) | 3,893 | (36,250) | (10,995) | | GAAP Diluted Loss Per Share | (0.24) | (2.51) | (1.80) | (5.49) | | Adjusted Diluted Loss (Income) Per Share | (0.15) | 0.30 | (1.66) | (0.86) | [Adjusted Operating Income (Loss) Reconciliation](index=8&type=section&id=Adjusted%20Operating%20Income%20(Loss)%20Reconciliation) This section provides a reconciliation from GAAP operating income (loss) to adjusted operating income (loss), detailing non-GAAP adjustments for Q2 and year-to-date periods Adjusted Operating Income (Loss) Reconciliation (USD in thousands) | Metric | Q2 August 2, 2025 | Q2 August 3, 2024 | YTD August 2, 2025 | YTD August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Income (Loss) | 4,106 | (21,776) | (20,011) | (49,764) | | Total Non-GAAP Adjustments | 1,961 | 36,007 | 2,099 | 58,914 | | Adjusted Operating Income (Loss) | 6,067 | 14,231 | (17,912) | 9,150 | [Adjusted Gross Profit and SG&A Reconciliation](index=9&type=section&id=Adjusted%20Gross%20Profit%20and%20SG&A%20Reconciliation) This section reconciles GAAP to adjusted figures for gross profit and SG&A, detailing non-GAAP adjustments for Q2 and year-to-date periods Adjusted Gross Profit Reconciliation (USD in thousands) | Metric | Q2 August 2, 2025 | Q2 August 3, 2024 | YTD August 2, 2025 | YTD August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Gross Profit | 101,272 | 111,794 | 172,055 | 204,535 | | Total Non-GAAP Adjustments | — | — | — | 905 | | Adjusted Gross Profit | 101,272 | 111,794 | 172,055 | 205,440 | Adjusted Selling, General, and Administrative Expenses Reconciliation (USD in thousands) | Metric | Q2 August 2, 2025 | Q2 August 3, 2024 | YTD August 2, 2025 | YTD August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Selling, General, and Administrative Expenses | 89,596 | 96,065 | 176,266 | 205,159 | | Total Non-GAAP Adjustments | (1,961) | (7,751) | (2,099) | (28,196) | | Adjusted Selling, General, and Administrative Expenses | 87,635 | 88,314 | 174,167 | 176,963 | [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) [About The Children's Place](index=4&type=section&id=About%20The%20Children's%20Place) The Children's Place is North America's largest pure-play children's specialty retailer, operating an omnichannel portfolio with a leading digital-first model - The Children's Place is North America's largest pure-play children's specialty retailer, featuring an omnichannel portfolio and an industry-leading, digital-first model[25](index=25&type=chunk) - Its global retail and wholesale network includes two digital storefronts, 494 stores in North America, and distribution in 12 countries through seven international franchise and wholesale partners[25](index=25&type=chunk) - The company primarily designs, contracts to manufacture, and sells stylish, high-quality, value-priced apparel under its proprietary brands: "The Children's Place," "Gymboree," "Sugar & Jade," and "PJ Place"[25](index=25&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding the company's strategic initiatives and operating performance, which are subject to various risks and uncertainties - This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, concerning the company's strategic initiatives and operating performance[26](index=26&type=chunk) - Forward-looking statements are based on 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[27](index=27&type=chunk) - Risk factors include the inability to achieve sufficient operating performance to fund operations and service debt, changes in trade policy and tariffs, failure to anticipate fashion trends, intense competition, economic shifts, supply chain disruptions, increased raw material costs, and litigation risks[28](index=28&type=chunk) [Contact](index=5&type=section&id=Contact) Investor Relations can be reached at (201) 558-2400, extension 14500 - Investor Relations Contact: (201) 558-2400 x 14500[30](index=30&type=chunk) [Condensed Consolidated Financial Statements (Appendix)](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Appendix)) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's condensed consolidated statements of operations for the second quarter and year-to-date periods of fiscal 2025 Condensed Consolidated Statements of Operations (Unaudited, in thousands of USD, except per share amounts) | | For the Second Quarter Ended | | For the Year-to-Date Ended | | :--- | :--- | :--- | :--- | :--- | | | August 2, 2025 | August 3, 2024 | August 2, 2025 | August 3, 2024 | | Net sales | $298,006 | $319,655 | $540,131 | $587,533 | | Cost of sales | 196,734 | 207,861 | 368,076 | 382,998 | | Gross profit | 101,272 | 111,794 | 172,055 | 204,535 | | Selling, general, and administrative expenses | 89,596 | 96,065 | 176,266 | 205,159 | | Depreciation and amortization | 7,570 | 9,505 | 15,800 | 21,140 | | Asset impairment charges | — | 28,000 | — | 28,000 | | Operating income (loss) | 4,106 | (21,776) | (20,011) | (49,764) | | Interest expense, related party | (1,868) | (2,087) | (3,740) | (2,476) | | Other interest expense, net | (6,150) | (7,144) | (12,840) | (14,476) | | Loss before provision for income taxes | (3,912) | (31,007) | (36,591) | (66,716) | | Provision for income taxes | 1,453 | 1,107 | 2,797 | 3,193 | | Net loss | $(5,365) | $(32,114) | $(39,388) | $(69,909) | | Loss per share - diluted | $(0.24) | $(2.51) | $(1.80) | $(5.49) | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the company's condensed consolidated balance sheets as of August 2, 2025, February 1, 2025, and August 3, 2024 Condensed Consolidated Balance Sheets (Unaudited, in thousands of USD) | | August 2, 2025 | February 1, 2025* | August 3, 2024 | | :--- | :--- | :--- | :--- | | **Assets:** | | | | | Cash and cash equivalents | $7,798 | $5,347 | $9,573 | | Accounts receivable | 54,365 | 42,701 | 61,926 | | Inventories | 442,705 | 399,602 | 520,593 | | Prepaid expenses and other current assets | 38,987 | 20,354 | 35,251 | | **Total current assets** | **543,855** | **468,004** | **627,343** | | Property and equipment, net | 89,445 | 97,487 | 111,296 | | Operating lease right-of-use assets | 151,145 | 161,595 | 163,539 | | Trademarks, net | 13,000 | 13,000 | 13,000 | | Other assets, net | 7,652 | 7,466 | 6,236 | | **Total Assets** | **$805,097** | **$747,552** | **$921,414** | | **Liabilities and Stockholders' Deficit:** | | | | | Revolving loan | $294,417 | $245,659 | $316,655 | | Accounts payable | 132,436 | 126,716 | 215,793 | | Current portion of operating lease liabilities | 60,546 | 67,407 | 67,610 | | Accrued expenses and other current liabilities | 96,497 | 78,336 | 98,458 | | **Total current liabilities** | **583,896** | **518,118** | **698,516** | | Long-term debt, related party | 107,193 | 165,974 | 165,354 | | Long-term operating lease liabilities | 103,982 | 107,287 | 110,596 | | Other long-term liabilities | 14,893 | 15,584 | 15,820 | | **Total Liabilities** | **809,964** | **806,963** | **990,286** | | Stockholders' deficit | (4,867) | (59,411) | (68,872) | | **Total Liabilities and Stockholders' Deficit** | **$805,097** | **$747,552** | **$921,414** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's condensed consolidated statements of cash flows for the year-to-date periods of fiscal 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands of USD) | | For the Year-to-Date Ended | | :--- | :--- | :--- | | | August 2, 2025 | August 3, 2024 | | Net loss | $(39,388) | $(69,909) | | Non-cash adjustments | 57,734 | 100,757 | | Changes in operating assets and liabilities | (91,782) | (225,535) | | **Net cash used in operating activities** | **(73,436)** | **(194,687)** | | **Net cash used in investing activities** | **(4,843)** | **(12,478)** | | **Net cash provided by financing activities** | **77,754** | **203,652** | | Effect of exchange rate changes on cash and cash equivalents | 2,976 | (553) | | Net increase (decrease) in cash and cash equivalents | 2,451 | (4,066) | | Cash and cash equivalents at beginning of period | 5,347 | 13,639 | | **Cash and cash equivalents at end of period** | **$7,798** | **$9,573** |

Core Insights - The Children's Place, Inc. reported a net loss of $(5.4) million for the second quarter of fiscal year 2025, an improvement from a net loss of $(32.1) million in the same quarter of the previous year, indicating a positive trend in financial performance [11][18] - The company is implementing a transformation initiative aimed at streamlining operations to achieve over $40 million in gross benefits over the next three years, focusing on reducing corporate costs and optimizing the distribution network [3][4] - The company experienced a decrease in net sales of $21.7 million, or 6.8%, to $298.0 million in the second quarter, primarily due to lower brick-and-mortar revenue and e-commerce sales [5][12] Financial Performance - Net sales for the six months ended August 2, 2025, decreased by $47.4 million, or 8.1%, to $540.1 million compared to the same period last year [12] - Gross profit for the second quarter decreased by $10.5 million to $101.3 million, with a gross margin decline of 100 basis points to 34.0% [6] - Selling, general, and administrative expenses were reduced to $89.6 million in the second quarter, down from $96.1 million in the prior year [7] Operational Updates - The company opened one store and closed two during the second quarter, ending with a total of 494 stores [19] - Inventory levels were reduced to $442.7 million as of August 2, 2025, compared to $520.6 million a year earlier, reflecting improved inventory management [21] - The company is projecting additional tariff and duty expenses of approximately $20 million to $25 million for fiscal year 2025, but plans to mitigate about 80% of these impacts through strategic initiatives [4] Strategic Initiatives - The transformation plan includes a review of the corporate cost structure, aiming to reduce corporate payroll from over $120 million to below $80 million by fiscal year 2026 [3] - The company is focusing on enhancing its direct-to-consumer business, which saw positive comparative sales growth for the first time in 18 months during July [2] - A new loyalty program is set to launch in the third quarter to drive customer retention and enhance lifetime value [3]

SECAUCUS, N.J., Aug. 22, 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 that their second quarter fiscal 2025 financial results will be released on Friday, September 5, 2025 at approximately 4:30 p.m. Eastern Time, which can be accessed at https://corporate.childrensplace.com/. About The Children’s Place The Children’s ...