Children's Place Releases Q4 Preliminary Unaudited Results, Says Company To See Quarterly Sales Of $454M-$456M (Estimate: $462.88M), Lower Than Prior Guidance Of $460M-$465M
Portfolio Pulse from Benzinga Newsdesk
Children's Place (PLCE) released its Q4 preliminary unaudited results, indicating sales of $454M-$456M, below the estimated $462.88M and prior guidance of $460M-$465M. The company expects an adjusted operating loss of 8%-9% of net sales, contrary to the previously guided 2%-3% operating income. This shift is attributed to lower merchandise margins due to aggressive promotions, higher e-commerce related split shipments, and increased inventory valuation adjustments. Year-end inventory is projected to be down 16%-20% from the previous year. Total liquidity as of February 3, 2024, is expected to be around $45 million, with a significant reduction in total indebtedness to approximately $277 million from $408 million in Q3 of fiscal 2023.
February 09, 2024 | 11:42 am
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NEGATIVE IMPACT
Children's Place reported lower than expected Q4 sales and an adjusted operating loss, a significant deviation from prior income guidance. Inventory is expected to decrease, and total indebtedness has significantly reduced.
The reported lower sales and shift from an expected operating income to a loss indicate operational challenges and may negatively impact investor sentiment in the short term. The reduction in inventory and significant debt reduction are positive, but the immediate financial performance concerns are likely to weigh more heavily on the stock price.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100