Why Children's Place Shares Are Slumping Today

Zinger Key Points
  • Children's Place revises Q4 net sales outlook downwards, leading to a sharp decline in share price.
  • Adjusted operating loss for Q4 expected to contrast sharply with prior guidance, contributing to the stock's slump.

Children’s Place, Inc. PLCE shares are diving on Friday.

The company said it expects fourth-quarter net sales to be roughly $454 million to $456 million, versus its prior guidance of $460 million to $465 million and below the estimate of $462.88 million.

Adjusted operating loss for the quarter is expected at (9.0%) to (8.0%) of net sales, contrasting with prior guidance of 2% to 3% of adjusted operating margin.

The company projects to end the year in a clean inventory position, with inventory expected to be down 16% to 20% versus the prior year.

As of February 3, 2024, total liquidity is expected to be approximately $45 million (including approximately $13 million of cash and cash equivalents).

Total indebtedness is expected to decrease by more than $100 million versus the third quarter of fiscal 2023 and, as of February 3, 2024, is expected to be approximately $277 million as compared to $408 million as of the end of the third quarter of fiscal 2023.

The company ended the third quarter of 2023 with 591 stores and square footage of 2.8 million, a decrease of 9% compared to the prior year, it said in a press release dated November 16.

Read Next: Nikola Rejects Dissident Nominees Amid Legal Battle With Former Chairman Trevor Milton – What’s Going On?

Price Action: PLCE shares are trading lower by 48% to $10.25 on the last check Friday. 

Photo via Wikimedia Commons

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In:
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!