The Children's Place reports 19 percent decline in Q3 net sales

The Children’s Place, Inc. said, net sales decreased 19 percent to 425.6 million dollars in the three months ended October 31, 2020, primarily as a result of a decrease in back-to-school sales due to schools adopting remote and hybrid learning models, along with the impact of permanent and temporary store closures. For the nine month period, net sales decreased 22.7 percent to 1.050 billion dollars.

Commenting on the results, Jane Elfers, President and Chief Executive Officer of The Children’s Place, said: “As expected, revenue during our peak back-to-school period was significantly impacted by the move to remote and hybrid learning models. We are approaching the fourth quarter with heightened caution and expect both sales and profitability to be under pressure due to the numerous headwinds created by the pandemic.”

Highlights of trading performance of The Children’s Place

Gross profit for the quarter was 146.1 million dollars compared to 198.1 million dollars in the three months ended November 2, 2019, while adjusted gross profit was 151.7 million dollars compared to 198.1 million dollars in the comparable period last year, and deleveraged 210 basis points to 35.7 percent of net sales. Operating income was 23.3 million dollars compared to 58 million dollars in the three months ended November 2, 2019, while adjusted operating income was 33.3 million dollars in the three months ended October 31, 2020, compared to 63.4 million dollars in the comparable period last year, and deleveraged 430 basis points to 7.8 percent of net sales.

The company added that net income for the quarter was 13.3 million dollars or 91 cents per diluted share compared to net income of 43 million dollars or 2.77 dollars per diluted share, in the three months ended November 2, 2019. Adjusted net income was 21.1 million dollars or 1.44 dollars per diluted share, compared to adjusted net income of 47.1 million dollars or 3.03 dollars per diluted share, in the comparable period last year.

Review of year-to-date results of The Children’s Place

Gross profit for the nine month period was 193.5 million dollars compared to 488.9 million dollars in the nine months ended November 2, 2019 and adjusted gross profit was 313.9 million dollars compared to 488.4 million dollars in the comparable period last year, and deleveraged 610 basis points to 29.9 percent of net sales. Operating loss was 214.3 million dollars compared to operating income of 66.8 million dollars in the nine months ended November 2, 2019, while adjusted operating loss was 29.5 million dollars compared to adjusted operating income of 75.9 million dollars in the comparable period last year, and deleveraged 840 basis points to 2.8 percent of net sales.

Net loss for the period under review was 148.1 million dollars or 10.13 dollars per diluted share compared to net income of 49.1 million dollars or 3.10 dollars per diluted share, in the nine months ended November 2, 2019. Adjusted net loss was 29.2 million dollars or 2 dollars per diluted share, compared to adjusted net income of 55.9 million dollars or 3.53 dollars per diluted share, in the comparable period last year.

Picture:Facebook/The Children's Place