Children's Place Shares Plummet As Inflation Batters Q2 Earnings

Children's Place Shares Plummet As Inflation Batters Q2 Earnings
  • Children's Place Inc PLCE reported a second-quarter FY22 sales decline of 8% year-on-year to $380.89 million, missing the consensus of $382.42 million.
  • The decrease in sales was primarily due to a slowdown in consumer demand resulting from the unprecedented inflation impacting customers.
  • Comparable retail sales decreased 8.7% for the quarter.
  • The gross profit decreased 31.2% Y/Y to $115.5 million, with the margin contracting 1,030 basis points to 30.3%. Adjusted gross margin contracted 1,046 basis points to 30.2%. 
  • The operating loss for the quarter was $(13.8) million versus an operating income of $37.8 million a year ago.
  • Adjusted EPS of $(0.89) missed the analyst consensus of $0.56.
  • The company held $28.2 million in cash and equivalents as of July 30, 2022.
  • Inventories for Q2 rose 33.6% Y/Y to $616.4 million.
  • Outlook: Children's Place sees FY22 sales of about $1.725 billion versus the Street view of $1.76 billion and adjusted EPS of about $7.00, below the consensus of $7.95.
  • It expects Q3 sales of about $500 million, versus the consensus of $507.8 million. Q3 Adjusted EPS of about $3.95 against the estimate of $3.94.
  • Price Action: PLCE shares are trading lower by 15.47% at $46.45 on the last check Wednesday.

Posted In: Briefswhy it's movingEarningsNewsGuidanceSmall CapMoversTrading IdeasGeneral