Children's Place Shares Drop as 3Q Sales Decline

Dow Jones2024-12-03

By Denny Jacob

Shares of Children's Place dropped after the children's clothing retailer posted a sharp decline in sales in the third quarter.

The stock fell 13% to $14.05 in premarket trading Tuesday. The shares were down about 30% from the start of the year as of market close on Monday.

The Secaucus, N.J., company on Tuesday reported net income of $20.1 million, or $1.57 a share, for the quarter ended Nov. 2, compared with $38.5 million, or $3.05 a share, in the same quarter last year.

Adjusted earnings, which strip out one-time items, came in at $2.04 a share.

Sales fell 19% to $390.2 million due to an expected decline in e-commerce revenue. Comparable retail sales decreased 17% for the quarter.

The company said it continued to pull back on unprofitable promotional strategies, inflated advertising spending and free-shipping offers during the quarter to improve profitability.

In February, Saudi investment firm Mithaq Capital disclosed it took a controlling, 54% stake in the struggling retailer.

The firm has made major changes to its business, including ousting the company's longtime chief executive and replacing her on an interim basis with Muhammad Umair, a former senior adviser for global trade finance fund Origin Funding Partners and investment manager at AMD Holdings.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

December 03, 2024 08:47 ET (13:47 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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