American kid’s apparel and accessories retailer The Children’s Place Place revealed a 5.7 per cent drop in net sales for the third quarter, totalling US $ 480.2 million, reflecting a US $ 28.9 million decrease. Concurrently, the company experienced a 7.3 per cent decline in comparable retail sales during the quarter.
This decline in net sales was attributed to multiple factors. The company cited a significant impact from ongoing challenges such as the sustained consumer demand slowdown due to unprecedented inflation, amplified concerns regarding domestic and geopolitical issues affecting consumer confidence, increased promotional activities within the sector, and the repercussions of permanent store closures.
Commenting on the performance, Jane Elfers, the company’s president and CEO said, “Our Q3 sales were slightly stronger than our projections. August top line represented approximately 39 per cent of the quarter. Post Labor Day sales were soft, however, we experienced a significant top-line lift later in the month of September and into mid-October as a result of cooler weather across the northern parts of the country, combined with the launch of three powerful celebrity marketing campaigns.”
In the three months ended 28th October, 2023, net sales decreased by US $ 28.9 million, marking a decline of 5.7 per cent to US $ 480.2 million from US $ 509.1 million in the same period last year.
Gross profit and adjusted gross profit saw a decrease of US $ 14.8 million, dropping to US $ 162.1 million in the three months ending 28th October, 2023, compared to US $ 176.9 million in the corresponding period in 2022. The adjusted gross margin also decreased by 110 basis points to 33.7 per cent of net sales from 34.8 per cent in the third quarter of 2022.
Selling, general, and administrative expenses amounted to US $ 104.8 million in the three months ending 28th October, 2023, compared to US $ 106.6 million in the same period last year. Adjusted SG&A was reported at US $ 102.9 million for the quarter ending 28th October, 2023, down from US $ 105.4 million in the comparable period in the previous year.
Operating income stood at US $ 45.0 million in the three months ending 28th October 2023, compared to US $ 57.8 million in the corresponding period of 29th October 2022. Adjusted operating income for the third quarter of 2023 was US $ 47.9 million, down from US $ 59.1 million in the same period the previous year. This represents a 160 basis points decline to 10.0 per cent of net sales compared to the prior year’s third quarter.
