The Children’s Place, Inc. (Nasdaq:
PLCE), the largest pure-play children’s specialty
apparel retailer in North America, today announced financial
results for the second quarter ended August 1, 2020.
Jane Elfers, President and Chief Executive Officer, said,
“Second quarter digital sales increased 118 percent. We have
clearly benefited from our $50 million digital transformation
investment, which provided us with the omni-channel capabilities
necessary to fulfill our strong online demand. Since the temporary
store closures in March, we have increased new customers to our
digital file by approximately 175 percent, converted our store-only
customers to omni-channel customers at a rate approximately 3 times
the pre-pandemic rate and increased our app downloads by nearly 115
percent. Combined, these provide a strong foundation for continued
digital growth as digital adoption, accelerated by the COVID-19
pandemic, continues to drive online sales to an increasingly
greater share of total sales and provides us with a long-term
market share opportunity.”
Elfers continued, “We opened the majority of our stores during
the last two weeks of June and, as of August 1, 2020, we had 771
stores open, representing 94 percent of our total fleet. We remain
on track to close 300 stores by the end of fiscal 2021 with a
target of 200 store closures in fiscal 2020, inclusive of the 102
stores that we permanently closed in the first half of 2020, and
100 closures in fiscal 2021.”
Elfers concluded, “Due to the large majority of schools adopting
remote or hybrid learning models for the start of the school year,
our back to school sales have been significantly impacted and we
anticipate a meaningful negative impact on our Q3 results.”
Second Quarter 2020 ResultsNet sales decreased
12.3% to $368.9 million in the three months ended August 1, 2020
from $420.5 million in the three months ended August 3, 2019,
primarily as a result of the impact of temporary store closures,
along with a decrease in back to school sales beginning in
mid-July, partially offset by increased digital sales.
Net loss was ($46.6) million, or ($3.19) per diluted share, in
the three months ended August 1, 2020, compared to net income of
$1.5 million, or $0.10 per diluted share, in the three months ended
August 3, 2019. Adjusted net loss was ($21.7) million, or ($1.48)
per diluted share, compared to adjusted net income of $3.0 million,
or $0.19 per diluted share, in the comparable period last year.
Gross profit was $67.1 million in the three months ended August
1, 2020, compared to $138.8 million in the three months ended
August 3, 2019. Adjusted gross profit was $93.8 million in the
three months ended August 1, 2020, compared to $138.8 million in
the comparable period last year, and deleveraged 760 basis points
to 25.4% of net sales, primarily as a result of higher fulfillment
costs related to meaningfully higher levels of ship-from-store
activity related to strong digital demand.
Selling, general, and administrative expenses were $114.3
million in the three months ended August 1, 2020, compared to
$116.4 million in the three months ended August 3, 2019. Adjusted
SG&A was $103.5 million in the three months ended August 1,
2020, compared to $115.5 million in the comparable period last
year, and deleveraged 60 basis points to 28.1% of net sales,
primarily as a result of the deleverage of fixed expenses resulting
from the decline in sales, partially offset by a reduction in
operating expenses associated with actions taken in response to the
COVID-19 pandemic.
Operating loss was ($64.5) million in the three months ended
August 1, 2020, compared to operating income of $3.8 million in the
three months ended August 3, 2019. Adjusted operating loss was
($25.2) million in the three months ended August 1, 2020, compared
to adjusted operating income of $5.8 million in the comparable
period last year, and deleveraged 820 basis points to (6.8%) of net
sales.
Fiscal Year-To-Date 2020 ResultsNet sales
decreased 25.1% to $624.1 million in the six months ended August 1,
2020 from $832.9 million in the six months ended August 3, 2019,
primarily as a result of temporary store closures, partially offset
by increased digital sales.
Net loss was ($161.4) million, or ($11.04) per diluted share, in
the six months ended August 1, 2020, compared to net income of $6.0
million, or $0.38 per diluted share, in the six months ended August
3, 2019. Adjusted net loss was ($50.3) million, or ($3.44)
per diluted share, compared to adjusted net income of $8.8 million,
or $0.55 per diluted share, in the comparable period last year.
Gross profit was $47.4 million in the six months ended August 1,
2020, compared to $290.8 million in the six months ended August 3,
2019. Adjusted gross profit was $162.1 million in the six months
ended August 1, 2020, compared to $290.3 million in the comparable
period last year, and deleveraged 890 basis points to 26.0% of net
sales, primarily as a result of higher fulfillment costs related to
meaningfully higher levels of ship-from-store activity related to
strong digital demand.
Selling, general, and administrative expenses were $212.8
million in the six months ended August 1, 2020, compared to $244.4
million in the six months ended August 3, 2019. Adjusted SG&A
was $191.7 million in the six months ended August 1, 2020, compared
to $242.6 million in the comparable period last year, and
deleveraged 160 basis points to 30.7% of net sales, primarily as a
result of the deleverage of fixed expenses resulting from the
decline in sales, partially offset by a reduction in operating
expenses associated with actions taken in response to the COVID-19
pandemic.
Operating loss was ($237.6) million in the six months ended
August 1, 2020, compared to operating income of $8.9 million in the
six months ended August 3, 2019. Adjusted operating loss was
($62.8) million in the six months ended August 1, 2020, compared to
adjusted operating income of $12.5 million in the comparable period
last year, and deleveraged 1,160 basis points to (10.1%) of
sales.
Non-GAAP ReconciliationThe Company’s results
are reported in this press release on a GAAP and as adjusted,
non-GAAP basis. Adjusted net income (loss), adjusted net income
(loss) per diluted share, adjusted gross profit (loss), adjusted
selling, general, and administrative expenses, and adjusted
operating income (loss) are non-GAAP measures, and are not intended
to replace GAAP financial information and may be different from
non-GAAP measures reported by other companies. The Company believes
the income and expense items excluded as non-GAAP adjustments are
not reflective of the performance of its core business and that
providing this supplemental disclosure to investors will facilitate
comparisons of the past and present performance of its core
business.
For the three months ended August 1, 2020, the Company’s
adjusted results exclude net expenses of approximately $39.2
million, primarily related to the impact of the COVID-19 pandemic,
including occupancy charges for rent at our stores temporarily
closed and incremental COVID-19 operating expenses, including
incentive pay and personal protective equipment for our
associates.
The total impact on income taxes for the above items was $14.3
million, including a benefit of $3.9 million, primarily resulting
from the changes in operating loss carryback rules as a result of
the Coronavirus Aid, Relief, and Economic Security (“CARES”)
Act.
For the six months ended August 1, 2020, the Company recorded an
inventory provision of $63.2 million and $37.6 million of
impairment charges, including the right-of-use assets recorded in
connection with the adoption of the new lease accounting standard.
The inventory provision relates to the adverse business disruption
resulting from the COVID-19 pandemic, including the store closures.
The impairment charges were primarily a result of decreased net
revenue and cash flow projections resulting from the COVID-19
disruption.
In addition to the inventory provision and impairment charges,
the Company’s adjusted results exclude net expenses of
approximately $66.6 million, primarily related to the impact of the
COVID-19 pandemic, including occupancy charges for rent at our
stores temporarily closed; incremental COVID-19 operating expenses,
including incentive pay and personal protective equipment for our
associates; and payroll and benefits for certain store employees
during the period our stores were closed, net of a payroll tax
credit benefit resulting from the CARES Act.
Additionally, the Company excluded net costs of $7.4 million,
primarily related to restructuring costs.
The total impact on income taxes for the above items was $63.7
million, including a benefit of $17.4 million, primarily resulting
from the changes in operating loss carryback rules as a result of
the CARES Act.
Store UpdateOn March 18, 2020, the Company
suspended all store operations in the U.S. and Canada due to the
COVID-19 pandemic. The Children’s Place started reopening stores on
May 19, 2020 in 10 states and reopened the majority of its
remaining stores during the last two weeks of June. As of August 1,
2020, the Company had 771 of its 824 stores open to the public in
the U.S., Canada and Puerto Rico, with the majority of the closed
stores located in California.
Consistent with the Company’s store fleet optimization
initiative, the Company opened two stores and permanently closed 98
stores in the three months ended August 1, 2020. The Company ended
the quarter with 824 stores and square footage of 3.9 million, a
decrease of 13.2% compared to the prior year. Since our fleet
optimization initiative was announced in 2013, the Company has
closed 373 stores.
The flexibility provided by its lease actions allows the Company
to target 200 store closures in fiscal 2020, including 102 stores
closed in the first half of fiscal 2020, and 100 additional
closures in fiscal 2021.
Balance Sheet and Cash FlowAs of August 1,
2020, the Company had approximately $36.1 million of cash and cash
equivalents with no long-term debt, and $250.8 million outstanding
on its revolving credit facility. The Company used approximately
$42.7 million in operating cash flow in the three months ended
August 1, 2020.
OutlookAs a result of the continued uncertainty
created by the COVID-19 pandemic, the Company is not providing
financial guidance.
Conference Call Information The Children’s
Place will host a conference call on Tuesday, August 25, 2020 at
8:00 a.m. Eastern Time to discuss its second quarter fiscal 2020
results.
The call will be broadcast live at
http://investor.childrensplace.com. An audio archive will be
available on the Company’s website approximately one hour after the
conclusion of the call. A conference call transcript will also be
posted on our website.
About The Children’s PlaceThe Children’s Place
is the largest pure-play children’s specialty apparel retailer in
North America. The Company designs, contracts to manufacture, sells
at retail and wholesale, and licenses to sell fashionable,
high-quality merchandise predominantly at value prices, primarily
under the proprietary “The Children’s Place”, “Place”, “Baby
Place,” and “Gymboree” brand names. As of August 1, 2020, the
Company had 824 stores in the United States, Canada and Puerto
Rico, online stores at www.childrensplace.com and www.gymboree.com,
and the Company’s international franchise partners had 276
international points of distribution in 19 countries.
Forward Looking StatementsThis press release
contains or may contain forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, including but not limited to statements
relating to the Company’s strategic initiatives and adjusted net
income per diluted share. Forward-looking statements
typically are identified by use of terms such as “may,” “will,”
“should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and
similar words, although some forward-looking statements are
expressed differently. These forward-looking statements are
based upon the Company's current expectations and assumptions and
are subject to various risks and uncertainties that could cause
actual results and performance to differ materially. Some of these
risks and uncertainties are described in the Company's filings with
the Securities and Exchange Commission, including in the “Risk
Factors” section of its annual report on Form 10-K for the fiscal
year ended February 1, 2020 and supplemented by the “Risk Factors”
section of its quarterly report on Form 10-Q for the fiscal quarter
ended May 2, 2020. Included among the risks and uncertainties that
could cause actual results and performance to differ materially are
the risk that the Company will be unsuccessful in gauging fashion
trends and changing consumer preferences, the risks resulting
from the highly competitive nature of the Company’s business and
its dependence on consumer spending patterns, which may be affected
by changes in economic conditions, the risks related to the
COVID-19 pandemic, including the impact of the COVID-19 pandemic on
our business or the economy in general (including decreased
customer traffic, schools adopting a remote learning model,
closures of businesses and other activities causing decreased
demand for our products and negative impacts on our customers’
spending patterns due to decreased income or actual or perceived
wealth, and the impact of the CARES Act and other legislation
related to the COVID-19 pandemic, and any changes to the CARES Act
or such other legislation), the risk that the Company’s strategic
initiatives to increase sales and margin are delayed or do not
result in anticipated improvements, the risk of delays,
interruptions and disruptions in the Company’s global supply chain,
including resulting from COVID-19 or other disease outbreaks,
foreign sources of supply in less developed countries or more
politically unstable countries, the risk that the cost of raw
materials or energy prices will increase beyond current
expectations or that the Company is unable to offset cost increases
through value engineering or price increases, various types of
litigation, including class action litigations brought under
consumer protection, employment, and privacy and information
security laws and regulations, the imposition of regulations
affecting the importation of foreign-produced merchandise,
including duties and tariffs, and the uncertainty of weather
patterns. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
they were made. The Company undertakes no obligation to release
publicly any revisions to these forward-looking statements that may
be made to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
Contact: Anthony Attardo, CFA, Director,
Investor Relations, (201) 453-6693
(Tables follow)
THE
CHILDREN’S PLACE, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In
thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter Ended |
|
Year-To-Date
Ended |
|
|
August
1, |
|
August
3, |
|
August
1, |
|
August
3, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net sales |
|
$ |
368,923 |
|
|
$ |
420,470 |
|
|
$ |
624,130 |
|
|
$ |
832,851 |
|
Cost of
sales |
|
|
301,843 |
|
|
|
281,624 |
|
|
|
576,723 |
|
|
|
542,030 |
|
Gross
profit |
|
|
67,080 |
|
|
|
138,846 |
|
|
|
47,407 |
|
|
|
290,821 |
|
Selling,
general and administrative expenses |
|
|
114,312 |
|
|
|
116,417 |
|
|
|
212,803 |
|
|
|
244,423 |
|
Asset
impairment charges |
|
|
544 |
|
|
|
121 |
|
|
|
37,635 |
|
|
|
469 |
|
Depreciation
and amortization |
|
|
16,708 |
|
|
|
18,472 |
|
|
|
34,596 |
|
|
|
37,056 |
|
Operating
income (loss) |
|
|
(64,484 |
) |
|
|
3,836 |
|
|
|
(237,627 |
) |
|
|
8,873 |
|
Interest
expense |
|
|
(2,639 |
) |
|
|
(2,278 |
) |
|
|
(4,479 |
) |
|
|
(3,989 |
) |
Income
(loss) before taxes |
|
|
(67,123 |
) |
|
|
1,558 |
|
|
|
(242,106 |
) |
|
|
4,884 |
|
Provision
(benefit) for income taxes |
|
|
(20,484 |
) |
|
|
35 |
|
|
|
(80,657 |
) |
|
|
(1,128 |
) |
Net income
(loss) |
|
$ |
(46,639 |
) |
|
$ |
1,523 |
|
|
$ |
(161,449 |
) |
|
$ |
6,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(3.19 |
) |
|
$ |
0.10 |
|
|
$ |
(11.04 |
) |
|
$ |
0.38 |
|
Diluted |
|
$ |
(3.19 |
) |
|
$ |
0.10 |
|
|
$ |
(11.04 |
) |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
14,634 |
|
|
|
15,818 |
|
|
|
14,623 |
|
|
|
15,832 |
|
Diluted |
|
|
14,634 |
|
|
|
15,859 |
|
|
|
14,623 |
|
|
|
15,983 |
|
|
|
|
|
|
|
|
|
|
THE
CHILDREN’S PLACE, INC. |
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO
GAAP |
(In
thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter Ended |
|
Year-To-Date
Ended |
|
|
August
1, |
|
August
3, |
|
August
1, |
|
August
3, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(46,639 |
) |
|
$ |
1,523 |
|
|
$ |
(161,449 |
) |
|
$ |
6,012 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Occupancy
charges |
|
|
23,932 |
|
|
|
- |
|
|
|
47,058 |
|
|
|
- |
|
Incremental
COVID-19 operating expenses |
|
|
9,840 |
|
|
|
- |
|
|
|
12,214 |
|
|
|
- |
|
Restructuring costs |
|
|
3,030 |
|
|
|
362 |
|
|
|
6,421 |
|
|
|
683 |
|
Accelerated
depreciation |
|
|
1,203 |
|
|
|
922 |
|
|
|
1,344 |
|
|
|
1,890 |
|
Fleet
optimization |
|
|
650 |
|
|
|
207 |
|
|
|
650 |
|
|
|
(28 |
) |
Asset
impairment charges |
|
|
544 |
|
|
|
121 |
|
|
|
37,635 |
|
|
|
469 |
|
Accounts
receivables |
|
|
38 |
|
|
|
- |
|
|
|
1,081 |
|
|
|
- |
|
Inventory
provision |
|
|
- |
|
|
|
- |
|
|
|
63,247 |
|
|
|
- |
|
Store
payroll and benefits, net of CARES Act retention credit |
|
|
- |
|
|
|
- |
|
|
|
4,242 |
|
|
|
- |
|
Gymboree
integration costs |
|
|
- |
|
|
|
380 |
|
|
|
640 |
|
|
|
574 |
|
Legal
reserve |
|
|
- |
|
|
|
- |
|
|
|
302 |
|
|
|
- |
|
Aggregate
impact of Non-GAAP adjustments |
|
|
39,237 |
|
|
|
1,992 |
|
|
|
174,834 |
|
|
|
3,588 |
|
Income tax
effect(1) |
|
|
(10,395 |
) |
|
|
(528 |
) |
|
|
(46,308 |
) |
|
|
(951 |
) |
Prior year
uncertain tax positions(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
135 |
|
Impact of
CARES Act |
|
|
(3,901 |
) |
|
|
- |
|
|
|
(17,378 |
) |
|
|
- |
|
Net impact
of Non-GAAP adjustments |
|
|
24,941 |
|
|
|
1,464 |
|
|
|
111,148 |
|
|
|
2,772 |
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) |
|
$ |
(21,698 |
) |
|
$ |
2,987 |
|
|
$ |
(50,301 |
) |
|
$ |
8,784 |
|
|
|
|
|
|
|
|
|
|
GAAP net
income (loss) per common share |
|
$ |
(3.19 |
) |
|
$ |
0.10 |
|
|
$ |
(11.04 |
) |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) per common share |
|
$ |
(1.48 |
) |
|
$ |
0.19 |
|
|
$ |
(3.44 |
) |
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
(1) The tax effects of
the non-GAAP items are calculated based on the statutory rate of
the jurisdiction in which the discrete item resides. |
|
|
|
|
|
|
|
|
|
(2) Prior year tax
related to uncertain tax positions. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter Ended |
|
Year-To-Date
Ended |
|
|
August
1, |
|
August
3, |
|
August
1, |
|
August
3, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
|
$ |
(64,484 |
) |
|
$ |
3,836 |
|
|
$ |
(237,627 |
) |
|
$ |
8,873 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Occupancy
charges |
|
|
23,932 |
|
|
|
- |
|
|
|
47,058 |
|
|
|
- |
|
Incremental
COVID-19 operating expenses |
|
|
9,840 |
|
|
|
- |
|
|
|
12,214 |
|
|
|
- |
|
Restructuring costs |
|
|
3,030 |
|
|
|
362 |
|
|
|
6,421 |
|
|
|
683 |
|
Accelerated
depreciation |
|
|
1,203 |
|
|
|
922 |
|
|
|
1,344 |
|
|
|
1,890 |
|
Fleet
optimization |
|
|
650 |
|
|
|
207 |
|
|
|
650 |
|
|
|
(28 |
) |
Asset
impairment charges |
|
|
544 |
|
|
|
121 |
|
|
|
37,635 |
|
|
|
469 |
|
Accounts
receivables |
|
|
38 |
|
|
|
- |
|
|
|
1,081 |
|
|
|
- |
|
Inventory
provision |
|
|
- |
|
|
|
- |
|
|
|
63,247 |
|
|
|
- |
|
Store
payroll and benefits, net of CARES Act retention credit |
|
|
- |
|
|
|
- |
|
|
|
4,242 |
|
|
|
- |
|
Gymboree
integration costs |
|
|
- |
|
|
|
380 |
|
|
|
640 |
|
|
|
574 |
|
Legal
reserve |
|
|
- |
|
|
|
- |
|
|
|
302 |
|
|
|
- |
|
Aggregate
impact of Non-GAAP adjustments |
|
|
39,237 |
|
|
|
1,992 |
|
|
|
174,834 |
|
|
|
3,588 |
|
|
|
|
|
|
|
|
|
|
Adjusted
operating income (loss) |
|
$ |
(25,247 |
) |
|
$ |
5,828 |
|
|
$ |
(62,793 |
) |
|
$ |
12,461 |
|
|
|
|
|
|
|
|
|
|
THE
CHILDREN’S PLACE, INC. |
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO
GAAP |
(In
thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter Ended |
|
Year-To-Date
Ended |
|
|
August
1, |
|
August
3, |
|
August
1, |
|
August
3, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
67,080 |
|
|
$ |
138,846 |
|
|
$ |
47,407 |
|
|
$ |
290,821 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Occupancy
charges |
|
|
23,932 |
|
|
|
- |
|
|
|
47,058 |
|
|
|
- |
|
Incremental
COVID-19 operating expenses |
|
|
2,745 |
|
|
|
- |
|
|
|
4,435 |
|
|
|
- |
|
Inventory
provision |
|
|
- |
|
|
|
- |
|
|
|
63,247 |
|
|
|
- |
|
Fleet
optimization |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(550 |
) |
Aggregate
impact of Non-GAAP adjustments |
|
|
26,677 |
|
|
|
- |
|
|
|
114,740 |
|
|
|
(550 |
) |
|
|
|
|
|
|
|
|
|
Adjusted
Gross profit |
|
$ |
93,757 |
|
|
$ |
138,846 |
|
|
$ |
162,147 |
|
|
$ |
290,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter Ended |
|
Year-To-Date
Ended |
|
|
August
1, |
|
August
3, |
|
August
1, |
|
August
3, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses |
|
$ |
114,312 |
|
|
$ |
116,417 |
|
|
$ |
212,803 |
|
|
$ |
244,423 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Incremental
COVID-19 operating expenses |
|
|
(7,095 |
) |
|
|
- |
|
|
|
(7,779 |
) |
|
|
- |
|
Restructuring costs |
|
|
(3,030 |
) |
|
|
(362 |
) |
|
|
(6,421 |
) |
|
|
(691 |
) |
Fleet
optimization |
|
|
(650 |
) |
|
|
(207 |
) |
|
|
(650 |
) |
|
|
(514 |
) |
Accounts
receivables |
|
|
(38 |
) |
|
|
- |
|
|
|
(1,081 |
) |
|
|
- |
|
Store
payroll and benefits, net of CARES Act retention credit |
|
|
- |
|
|
|
- |
|
|
|
(4,242 |
) |
|
|
- |
|
Gymboree
integration costs |
|
|
- |
|
|
|
(380 |
) |
|
|
(640 |
) |
|
|
(574 |
) |
Legal
reserve |
|
|
- |
|
|
|
- |
|
|
|
(302 |
) |
|
|
- |
|
Aggregate
impact of Non-GAAP adjustments |
|
|
(10,813 |
) |
|
|
(949 |
) |
|
|
(21,115 |
) |
|
|
(1,779 |
) |
|
|
|
|
|
|
|
|
|
Adjusted
Selling, general and administrative expenses |
|
$ |
103,499 |
|
|
$ |
115,468 |
|
|
$ |
191,688 |
|
|
$ |
242,644 |
|
|
|
|
|
|
|
|
|
|
THE
CHILDREN’S PLACE, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
August
1, |
|
February
1, |
|
August
3, |
|
|
2020 |
|
2020* |
|
2019 |
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
36,119 |
|
$ |
68,487 |
|
$ |
65,357 |
Accounts receivable |
|
|
29,634 |
|
|
32,812 |
|
|
39,638 |
Inventories |
|
|
381,022 |
|
|
327,165 |
|
|
386,174 |
Other current assets |
|
|
23,085 |
|
|
21,416 |
|
|
30,258 |
Total current assets |
|
|
469,860 |
|
|
449,880 |
|
|
521,427 |
|
|
|
|
|
|
|
Property and equipment, net |
|
|
200,963 |
|
|
236,898 |
|
|
248,777 |
Right-of-use assets |
|
|
319,796 |
|
|
393,820 |
|
|
430,145 |
Tradenames, net |
|
|
72,892 |
|
|
73,291 |
|
|
73,456 |
Other assets, net |
|
|
104,428 |
|
|
27,508 |
|
|
29,732 |
Total assets |
|
$ |
1,167,939 |
|
$ |
1,181,397 |
|
$ |
1,303,537 |
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
Revolving loan |
|
$ |
250,818 |
|
$ |
170,808 |
|
$ |
196,352 |
Accounts payable |
|
|
279,014 |
|
|
213,115 |
|
|
236,619 |
Current lease liabilities |
|
|
160,932 |
|
|
121,868 |
|
|
127,695 |
Accrued expenses and other current liabilities |
|
|
118,778 |
|
|
89,216 |
|
|
113,531 |
Total current liabilities |
|
|
809,542 |
|
|
595,007 |
|
|
674,197 |
|
|
|
|
|
|
|
Long-term lease liabilities |
|
|
254,187 |
|
|
311,908 |
|
|
341,828 |
Other liabilities |
|
|
42,695 |
|
|
39,295 |
|
|
38,256 |
Total liabilities |
|
|
1,106,424 |
|
|
946,210 |
|
|
1,054,281 |
|
|
|
|
|
|
|
Stockholders' equity |
|
|
61,515 |
|
|
235,187 |
|
|
249,256 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
1,167,939 |
|
$ |
1,181,397 |
|
$ |
1,303,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Derived from the audited consolidated financial statements included
in the Company's Annual Report on Form 10-K for the fiscal
year ended February 1, 2020. |
THE
CHILDREN’S PLACE, INC. |
CONDENSED
CONSOLIDATED CASH FLOWS |
(In
thousands) |
(Unaudited) |
|
|
|
26 Weeks
Ended |
|
26 Weeks
Ended |
|
|
August
1, |
|
August
3, |
|
|
2020 |
|
2019 |
|
|
|
|
|
Net income
(loss) |
|
$ |
(161,449 |
) |
|
$ |
6,012 |
|
Non-cash adjustments |
|
|
54,857 |
|
|
|
117,861 |
|
Working Capital |
|
|
23,388 |
|
|
|
(100,578 |
) |
Net cash provided by (used in) operating activities |
|
|
(83,204 |
) |
|
|
23,295 |
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(14,109 |
) |
|
|
(97,468 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
64,565 |
|
|
|
69,306 |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
380 |
|
|
|
1,088 |
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
(32,368 |
) |
|
|
(3,779 |
) |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
68,487 |
|
|
|
69,136 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
36,119 |
|
|
$ |
65,357 |
|
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