Children’s Place reports Q3 adjusted EPS $2.04 vs. $3.22 last year

Reports Q3 revenue $390.2M vs. $480.2M last year. Comparable retail sales decreased 17.1% for the quarter, largely driven by the planned decrease in e-commerce revenue, as the Company proactively sacrificed unprofitable sales to improve profitability. Muhammad Umair, interim CEO said, “During the third quarter, we continued our efforts to improve the profitability of the business and provide a foundation for future growth and we were able to achieve a second consecutive quarter of adjusted profits. As we previously discussed, we anticipated our strategic changes would provide pressure to topline sales, however we are laser focused on profitability and willing to proactively sacrifice unprofitable sales to improve operating results for our shareholders. We were also extremely pleased to drive further improvements in gross profit margin versus the prior year’s third quarter and sequential improvement in margin for all three quarters this year. In addition, we also continued our efforts to decrease Adjusted SG&A expenses, as we significantly reduced marketing spend and further reduced payroll costs, resulting in a $9 million reduction in expenses. These efforts resulted in our second consecutive profitable quarter with more than $35 million of Adjusted operating income and $44.5 million of Adjusted EBITDA. We were also delighted to expand our reach as we introduced a new partnership with SHEIN, opening up opportunities for the Company to reach customers that would not typically be found in our customer file, by making shopping even more effortless, accessible and exciting for these potential new customers. Finally, we are eager to refocus our efforts on our store portfolio, which is a critical piece of our omni-channel strategy. We recently opened our first new Gymboree store in Garden State Plaza Mall located in Paramus, New Jersey and plan to further invest in real estate while continuing to strengthen our landlord relationships. While these first steps to improve operating results have been promising, we still believe that we have significant work ahead of us in a highly promotional fourth quarter, as well as future quarters as we continue to rationalize profitability.”