Children's Place Slashes FY22 Expectations Reflecting Macro Issues, Supply Chain Cost Pressure

Children's Place Slashes FY22 Expectations Reflecting Macro Issues, Supply Chain Cost Pressure
  • Children's Place Inc PLCE reported a third-quarter FY22 sales decline of 8.8% year-on-year to $509.12 million, beating the consensus of $499.44 million. Comparable retail sales decreased 10% for the quarter.
  • The decrease in sales was primarily due to permanent store closures and a slowdown in consumer demand resulting from the unprecedented inflation impacting its customers.
  • The gross profit decreased 27.7% Y/Y to $176.9 million, with the margin contracting 910 basis points to 34.7%.
  • The operating margin was 11.3%, and the operating income plunged 49.2% to $57.8 million.
  • Adjusted EPS of $3.33 missed the analyst consensus of $3.73.
  • The company held $19.2 million in cash and equivalents as of October 29, 2022.
  • Inventories for Q3 rose 24% Y/Y to $549 million.
  • Outlook: Children's Place sees FY22 sales of about $1.713 billion - $1.723 billion (prior view ~$1.725 billion) versus the Street view of $1.72 billion and adjusted EPS of$4.05 - $4.30 (prior view ~$7.00), below the consensus of $6.46.
  • It expects Q4 sales of $460 million - $470 million versus the consensus of $480 million. Q4 Adjusted EPS of $0.50 - $0.75 against the estimate of $2.33.
  • Price Action: PLCE shares are trading higher by 0.44% at $36.29 on the last check Thursday.
  • Photo Via Company
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