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Strong Back-to-School Start Boosts The Children's Place Shares

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Andrew R. Michaud

• August 19, 2023

The Children's Place, a New Jersey-based children's apparel retailer, saw its shares trade higher on Thursday after announcing a strong start to the back-to-school shopping season. Despite facing challenges such as high inflation, promotions, and store closures, the company reported better-than-expected sales of $345.6 million, surpassing analysts' forecast of $342.2 million, according to FactSet.

Sales Accelerate Amidst Decline

The company's sales declined by 9.3% due to various factors, including consumer hesitation caused by high inflation. However, The Children's Place noted that sales began picking up during the quarter, thanks to a robust start to the back-to-school shopping season.

Improved Financial Performance

In terms of financial performance, The Children's Place reported a second-quarter loss of $35.36 million, or $2.82 per share. This is compared to a loss of $13.3 million, or $1.01 per share, in the same period last year. Excluding certain one-time expenses like restructuring costs and asset impairment charges, the adjusted loss per share came in at $2.12 - slightly narrower than the expected loss of $2.13 per share, as forecasted by analysts.

Promising Third-Quarter Outlook

Looking ahead, The Children's Place expects third-quarter sales to reach between $470 million and $475 million. This exceeds analysts' expectations of $470 million. Additionally, the company anticipates adjusted per-share earnings ranging from $3.55 to $3.65. FactSet analysts projected earnings slightly higher at $3.73 per share.

Overall, The Children's Place is optimistic about its future performance as it continues to navigate the challenges of the retail industry.