Children's Place Net Drops 56%, Cuts Sales Outlook

Scott Peters
19 May, 2022
New York City

Children's Place Inc, the specialty apparel retailer, reported revenues in the first quarter ending in April declined 16.8% to $362.4 million and net income fell 56% to $19.8 million. 

Diluted earnings per share declined 49% to $1.43 from $3.01 a year ago. 

The company also said March sales in the current quarter were 35% lower from a year ago on inclement weather across the nation, rising food and energy prices and the expiring of Covid-19 stimulus program kept consumers away. 

March temperatures dropped to record two-decade lows in many regions in the country. 

Net sales declined 12.1% from $421.4 million in three months ended May 2019 a year. 

The retailer has been reducing its network of stores and lowering retail footprint and closed several underperforming stores during the two years of pandemic. 

The company closed 7 stores in the quarter and plans to close 50 stores in the year.

The store count declined to 665 from 971 at the pre-pandemic end of first quarter 2019. 

At the end of the first quarter, retail square foot space declined 8% to 3.2 million or 30% from the end of first quarter 2019. 

In the quarter the company repurchased 660,000 shares for $38.8 million and $218.6 million still available for the program. 

Guidance and Outlook 

The company said it is no longer providing earnings per share outlook considering the economic and market uncertainties. 

The company lowered its full-year 2022 revenues to decline in mid-single digits. 

The retailer also held out for its long term goal of growing operating margin and earnings per share in double digits. 

Company and Stock 

Children's Place stock dropped as much as 10% in pre-market trading after the earnings release but in the regular session jumped 11% to $48.04. 

In the year-so-far, Children's Place stock has declined 39.7%.