Children's Place Q3 2024 Filing Released

TL;DR

Children's Place dropped its Q3 2024 10-Q. Check financials.

AI Summary

Children's Place, Inc. reported its third quarter results for the period ending November 2, 2024. The company's fiscal year ends on February 1st. The filing details financial information and business operations for this period.

Why It Matters

This filing provides investors with the latest financial performance data for Children's Place, Inc., crucial for understanding the company's current health and future prospects.

Risk Assessment

Risk Level: medium — The filing is a standard quarterly report, but the retail sector can be volatile, impacting Children's Place's performance.

Key Players & Entities

• Children's Place, Inc. (company) — Filer of the 10-Q report
• 2024-11-02 (date) — End of the reporting period
• 2024-12-06 (date) — Date the filing was made
• Secaucus, NJ (location) — Company's business and mailing address

FAQ

Key Financial Figures

• $0.10 — ange on which registered Common Stock, $0.10 par value PLCE Nasdaq Global Select Mar

Filing Documents

• plce-20241102.htm (10-Q) — 1457KB
• exhibit106q32024.htm (EX-10.6) — 81KB
• exhibit107q32024.htm (EX-10.7) — 76KB
• exhibit3112024q3.htm (EX-31.1) — 11KB
• exhibit3122024q3.htm (EX-31.2) — 11KB
• exhibit322024q3.htm (EX-32) — 9KB
• 0001628280-24-050199.txt ( ) — 7048KB
• plce-20241102.xsd (EX-101.SCH) — 41KB
• plce-20241102_cal.xml (EX-101.CAL) — 67KB
• plce-20241102_def.xml (EX-101.DEF) — 218KB
• plce-20241102_lab.xml (EX-101.LAB) — 548KB
• plce-20241102_pre.xml (EX-101.PRE) — 387KB
• plce-20241102_htm.xml (XML) — 971KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION PAGE Item 1. F inancial S tatements . Consolidated Balance Sheets as of November 2, 2024, February 3, 2024 and October 28, 2023 1 Consolidated Statements of Operations for the thirteen weeks and thirty-nine weeks ended November 2, 2024 and October 28, 2023 2 Consolidated Statements of Comprehensive Income (loss) for the thirteen weeks and thirty-nine weeks ended November 2, 2024 and October 28, 2023 3 Consolidated Statements of Changes in Stockholders ' (Deficit) Equity for the thirteen weeks and thirty-nine weeks ended November 2, 2024 and October 28, 2023 4 Consolidated Statements of Cash Flows for the thirty-nine weeks ended November 2, 2024 and October 28, 2023 6 Notes to C onsolidated F inancial S tatements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations . 24 Item 3.

Quantitative and Qualitative Disclosures A bout Market Risk

Quantitative and Qualitative Disclosures A bout Market Risk . 36 Item 4.

Controls and Procedures

Controls and Procedures . 37

— OTHER INFORMATION

PART II — OTHER INFORMATION Item 1. Legal Proceedings . 38 Item 1A. Risk Factors . 38 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds . 38 Item 5. Other Information . 38 Item 6. Exhibits . 39 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS. THE CHILDREN'S PLACE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) November 2, 2024 February 3, 2024 October 28, 2023 (in thousands, except par value) ASSETS Current assets: Cash and cash equivalents $ 5,749 $ 13,639 $ 13,522 Accounts receivable 62,214 33,219 51,712 Inventories 491,619 362,099 462,411 Prepaid expenses and other current assets 43,109 43,169 69,710 Total current assets 602,691 452,126 597,355 Long-term assets: Property and equipment, net 105,486 124,750 134,639 Right-of-use assets 159,374 175,351 127,863 Tradenames, net 13,000 41,123 70,291 Deferred income taxes — — 35,237 Other assets 8,242 6,958 7,996 Total assets $ 888,793 $ 800,308 $ 973,381 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Current liabilities: Revolving loan $ 362,375 $ 226,715 $ 358,679 Accounts payable 125,912 225,549 182,594 Current portion of operating lease liabilities 65,151 69,235 66,216 Income taxes payable 2,413 5,297 2,167 Accrued expenses and other current liabilities 93,142 89,608 96,086 Total current liabilities 648,993 616,404 705,742 Long-term liabilities: Long-term debt — 49,818 49,801 Related party long-term debt 165,664 — — Long-term portion of operating lease liabilities 108,390 118,073 76,641 Income taxes payable — 9,486 9,611 Other tax liabilities 5,061 4,664 3,529 Other long-term liabilities 10,259 10,882 9,986 Total liabilities 938,367 809,327 855,310 Commitments and contingencies (see Note 8) Stockholders' (deficit) equity: Preferred stock, $ 1.00 par value, 1,000 shares authorized, 0 shares issued and outstanding — — — Common stock, $ 0.10 par value, 100,000 shares authorized; 12,779 , 12,585 , and 12,549 issued; 12,776 , 12,529 , and 12,476 outstanding 1,278 1,259 1,255 Additional paid-in capital 151,359 141,083 140,330 Treasury stock, at cost ( 3 , 56 , and 73 shares) ( 110 ) ( 2,909 ) ( 3,932 ) Deferred compensation 110 2,909 3,932 Accumulated other compre

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION Description of Business The Children's Place, Inc. and its subsidiaries (collectively, the "Company") operate an omni-channel children's specialty portfolio of brands. Its global retail and wholesale network includes two digital storefronts, more than 500 stores in North America, wholesale marketplaces and distribution in 15 countries through six international franchise partners. The Company designs, contracts to manufacture, and sells fashionable, high-quality apparel, accessories and footwear predominantly at value prices, primarily under the Company's proprietary brands: "The Children's Place", "Gymboree", "Sugar & Jade", and "PJ Place". The Company classifies its business into two segments: The Children's Place U.S. and The Children's Place International. Included in The Children's Place U.S. segment are the Company's U.S. and Puerto Rico-based stores and revenue from its U.S.-based wholesale business. Included in The Children's Place International segment are its Canadian-based stores, revenue from the Company's Canadian-based wholesale business, as well as revenue from international franchisees. Each segment includes an e-commerce business located at www.childrensplace.com and www.gymboree.com. The Company also has social media channels on Instagram, Facebook, X, formerly known as Twitter, YouTube and Pinterest. Terms that are commonly used in the notes to the Company's consolidated financial statements are defined as follows: Third Quarter 2024 — The thirteen weeks ended November 2, 2024 Third Quarter 2023 — The thirteen weeks ended October 28, 2023 Second Quarter 2024 — The thirteen weeks ended August 3, 2024 First Quarter 2024 — The thirteen weeks ended May 4, 2024 Year-To-Date 2024 — The thirty-nine weeks ended November 2, 2024 Year-To-Date 2023 — The thirty-nine weeks ended October 28, 2023 Fiscal 2024 — The fifty-two weeks ending February 1, 2025 Fiscal 2023 —

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the consolidated financial position of the Company as of November 2, 2024 and October 28, 2023, the results of its consolidated operations, consolidated comprehensive income (loss), and consolidated changes in stockholders' (deficit) equity for the thirteen weeks and thirty-nine weeks ended November 2, 2024 and October 28, 2023, and consolidated cash flows for the thirty-nine weeks ended November 2, 2024 and October 28, 2023. The consolidated balance sheet as of February 3, 2024 was derived from audited financial statements. Due to the seasonal nature of the Company's business, the results of operations for the thirteen weeks and thirty-nine weeks ended November 2, 2024 and October 28, 2023 are not necessarily indicative of operating results for a full fiscal year. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2024. Liquidity The Company incurred net losses during Year-To-Date 2024, and in Fiscal 2023 and Fiscal 2022. As of November 2, 2024, the Company had an Accumulated deficit of $ 184.7 million and a working capital deficit of $ 46.3 million, which included borrowings of $ 362.4 million under its asset-based revolving credit facility (the "ABL Credit Facility"), which will mature in November 2026, pursuant to its credit agreement, dated as of May 9, 2019, (as amended from time to time, the "Credit Agreement"), by and among the Company, certain of its subsidiaries and the lenders party thereto. As of November 2, 2024, the Company had availability under its ABL Credit Facility of $ 48.3 million. The Company also has access to a senior unsecured credit facility of up to $ 40.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) In December 2023, the FASB issued Accounting Standards Update No. 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," ("ASU 2023-09"). The amendments in ASU 2023-09 are designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements. 2. REVENUES Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The following table presents the Company's revenues disaggregated by geography: Thirteen Weeks Ended Thirty-nine Weeks Ended November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023 (in thousands) Net sales: South $ 127,050 $ 168,623 $ 355,945 $ 416,249 Northeast 78,891 96,052 183,571 220,519 West 42,310 55,567 115,063 144,920 Midwest 42,510 58,331 103,001 131,235 International and other (1) 99,412 101,661 220,126 234,551 Total net sales $ 390,173 $ 480,234 $ 977,706 $ 1,147,474 ____________________________________________ (1) Includes retail and e-commerce sales in Canada and Puerto Rico, wholesale and franchisee sales, and certain amounts earned under the Company's private label credit card program. The Company recognizes revenue, including shipping and handling fees billed to customers, upon purchase at the Company's retail stores or when received by the customer if the product was purchased via e-commerce, net of coupon redemptions and anticipated sales returns. The Company deferred sales of $ 9.3 million

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The Company's private label credit card is issued to customers for use exclusively at The Children's Place stores and online at www.childrensplace.com and www.gymboree.com , and credit is extended to such customers by a third-party financial institution on a non-recourse basis to the Company. The private label credit card includes multiple performance obligations for the Company, including marketing and promoting the program on behalf of the bank and the operation of the loyalty rewards program. Included in the agreement with the third-party financial institution was an upfront bonus paid to the Company and an additional bonus to extend the term of the agreement. These bonuses are recognized as revenue and allocated between brand and reward obligations. As the license of the Company's brand is the predominant item in the performance obligation, the amount allocated to the brand obligation is recognized on a straight-line basis over the term of the agreement. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur. In measuring revenue and determining the consideration the Company is entitled to as part of a contract with a customer, the Company takes into account the related elements of variable consideration, such as additional bonuses, including profit-sharing, over the life of the private label credit card program. Similar to the upfront bonus, the usage-based royalties and bonuses are recognized as revenue and allocated between the brand and reward obligations. The amount allocated to the brand obligation is recognized on a straight-line basis over the initial term. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur. In addition, the annual profit-sharing amount is recognized quarterly within an annual period when it can be estimated reli

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