The Children’s Place (PLCE) Q2 2025 Financial Results Summary

# The Children’s Place (PLCE) Q2 2025 Financial Results Summary

**Release Date: September 5, 2025**

The Children’s Place, Inc. (Nasdaq: PLCE) reported its financial results for the second fiscal quarter ended August 2, 2025. The results reflect the company’s response to a challenging macroeconomic environment while announcing a major transformation initiative aimed at revitalizing the brand.

## Key Financial Highlights:
– **Net Sales:** Decreased by **$21.7 million**, or **6.8%**, resulting in **$298.0 million** compared to **$319.7 million** in Q2 2024.
– **Comparable Retail Sales:** Decreased by **4.7%** year over year.
– **Gross Profit:** Decreased by **$10.5 million** to **$101.3 million**, with a gross margin decline of **100 basis points** to **34.0%** from **35.0%** in the prior year.
– **Selling, General, and Administrative Expenses:** Decreased by **$6.5 million** to **$89.6 million**, with adjusted SG&A expenses of **$87.6 million**, a **decrease of 0.8%** (from **$88.3 million**).
– **Operating Income:** Reported at **$4.1 million**, a turnaround from the operating loss of **$(21.8) million** in Q2 2024.
– **Net Interest Expense:** Declined by **$1.2 million** to **$8.0 million**, aided by lower average borrowings and interest rates.
– **Provision for Income Taxes:** Increased to **$1.5 million** from **$1.1 million** in Q2 2024.
– **Net Loss:** Recorded at **$(5.4) million**, or **$(0.24) per diluted share**, compared to a loss of **$(32.1) million**, or **$(2.51) per diluted share** in the prior year.
– **Adjusted Net Loss:** Reported at **$(3.4) million**, or **$(0.15) per diluted share**, compared to an adjusted net income of **$3.9 million**, or **$0.30** per diluted share last year.

## Fiscal Year-to-Date Highlights:
– **Net Sales:** Decreased by **$47.4 million**, or **8.1%**, totaling **$540.1 million** versus **$587.5 million** in the same period last year.
– **Comparable Retail Sales:** Decreased by **8.9%** YTD.
– **Gross Profit:** Decreased by **$32.5 million** to **$172.1 million**, with a gross margin decline of **290 basis points** to **31.9%** from **34.8%** year over year.
– **Selling, General, and Administrative Expenses:** Decreased by **$28.9 million** to **$176.3 million** for the year-to-date period.
– **Operating Loss:** Reported at **$(20.0) million**, an improvement from the **$(49.8) million** loss last year.
– **Net Loss:** Reported at **$(39.4) million**, or **$(1.80) per diluted share**, compared to **$(69.9) million**, or **$(5.49)** per diluted share previously.
– **Adjusted Net Loss:** Stood at **$(36.3) million**, or **$(1.66) per diluted share**, compared to **$(11.0) million**, or **$(0.86)** per diluted share last year.

## Operational Updates:
– **Store Count:** The company opened **1 store** and closed **2 stores**, ending the quarter with **494 stores**, down from **515 stores** a year ago.
– **Inventory Management:** Achieved a **$78 million reduction** in inventories compared to the prior year, totaling **$442.7 million**.

## Transformation Initiative:
– The company announced a transformation plan aiming to yield over **$40 million** in gross benefits over three years. Key highlights include:
– Reducing corporate office costs and optimizing the distribution network.
– Rightsizing non-merchandise and third-party spending.
– Shifting strategy from closing stores to opening new ones.
– Estimated one-time costs related to transformation efforts are between **$5 million** and **$10 million**.

## Cash Flow and Liquidity:
– Total liquidity reported at **$91.6 million**, with **$7.8 million** in cash and equivalents, and the ability to borrow **$43.8 million** under the revolving credit facility.
– Operating cash flows used **$73.4 million** year-to-date.

## Dividends and Share Repurchase:
– No quarterly dividend was declared.
– There was no mention of any share repurchase activity in the report.

The company’s efforts to reposition itself amid a challenging retail landscape signal a cautious but strategic approach to driving future growth, with continued focus on improving operational efficiencies and enhancing customer engagement.