The Children’s Place Reports Second Quarter 2026 Results

Opened 19 new stores during the quarter 
Significant decrease in inventory balance compared to the prior year

SECAUCUS, N.J., Sept. 14, 2026 (GLOBE NEWSWIRE) -- The Children’s Place, Inc. (Nasdaq: PLCE), one of the only pure-play children’s specialty retailers in North America with an omni-channel presence, today announced financial results for the Company’s second fiscal quarter ended August 1, 2026.

Muhammad Asif Seemab, President and Interim Chief Executive Officer said, “During the quarter, we continued to contend with stabilizing our customer file, driving traffic to our stores and websites, and lower conversion, combined with a very clearance-heavy mix. The transition of our e-commerce operations to Salesforce has also taken longer than anticipated, which has contributed in part to the sales decline. Further, last year’s strong back-to-school demand was uniquely elevated by customer demand ahead of anticipated tariff price increases, which skewed those financial results compared to this year’s. Despite the near-term headwinds, we continue to invest in the long-term strength of the business focused on our strategic priorities: improving our customer experience, strengthening and elevating the brand, delivering on financial targets and enhancing organization leadership.”

Mr. Seemab continued, “During the quarter, we opened 19 new stores, which is the most in any quarter since 2013, and we remained focused on boosting the profitability of our fleet. We implemented new turnaround capabilities into the market for the first time during this back-to-school season, focused on enhancing our understanding of the effectiveness of our brand media. We have integrated AI to enhance the user-friendliness of our website and coordinated national brand events that generated more customer engagement. Early results from these new initiatives are encouraging: brand media generated a measured return of over 7-times, while AI-enabled creative optimization is already increasing e-commerce conversion and will be scaled further for the upcoming holiday season. Our traffic trends have improved in August relative to July, and we plan to build on these capabilities and continue the momentum into the holiday season. We are also advancing our international growth strategy by hiring Alexandra Derner as Chief Growth Officer, with a mandate to increase the global reach of the brand, including our planned entry into Mexico.”

Mr. Seemab concluded, “When I took on this role two months ago, I had a clear mandate to strengthen the Company’s financial position and liquidity. While we continue to execute our transformation plan and remain focused on cost reduction in all aspects of the business to optimize efficiencies, we are also evaluating our operating model to function in a profitable manner and improve our immediate liquidity position. I am excited about the opportunities ahead as we continue to execute on our long-term transformation plans.”

Second Quarter 2026 Results
Net sales decreased $56.2 million, or 18.9%, to $241.8 million in the three months ended August 1, 2026, compared to $298.0 million in the three months ended August 2, 2025. The decrease in net sales was driven by a decrease in direct-to-consumer (“DTC”) sales of 15.0% due to lower traffic compared to the prior year. Comparable retail sales in our owned and operated DTC business decreased 16.7% for the quarter. Our consolidated results were also impacted by the planned reduction in shipments for our wholesale channel to align inventory positions with our customers, and to liquidate aged fashion inventories. These negative trends have started to reverse during the beginning of the third quarter as our wholesale partners build back their inventory levels ahead of the holiday season.

Gross profit decreased $18.0 million to $83.3 million in the three months ended August 1, 2026, compared to $101.3 million in the three months ended August 2, 2025. Gross margin increased 40 basis points (“bps”) to 34.4% during the three months ended August 1, 2026, compared to 34.0% in the prior year. The increase in gross margin was caused primarily by the impact of tariff refunds recognized during the quarter amounting to $39 million, which was accounted for as a reduction of Cost of sales. Excluding the impact of these refunds, our gross margin decreased 1,550 bps primarily due to a higher penetration of markdown sales (590 bps), higher tariffs on our product (330 bps), increased store occupancy costs due to new store openings (260 bps), and an increase in inventory reserves (250 bps), partially offset by favorable product mix and costs (100 bps). Adjusted gross profit decreased $17.6 million to $83.7 million in the three months ended August 1, 2026, compared to $101.3 million in the three months ended August 2, 2025. Adjusted gross margin increased 60 bps to 34.6% during the three months ended August 1, 2026, compared to 34.0% in the prior year, inclusive of the impact of tariff refunds.

Selling, general, and administrative expenses increased $0.5 million to $90.1 million in the three months ended August 1, 2026, compared to $89.6 million in the three months ended August 2, 2025, and deleveraged 710 bps to 37.2% of net sales. The increase was primarily due to an increase in store expenses as we opened 19 new stores, combined with the impact of unfavorable foreign currency exchange movements, partially offset by lower marketing expense as we continue to focus on rationalizing our spend, and lower payroll costs from our transformation efforts. Adjusted selling, general, and administrative expenses were $88.3 million in the three months ended August 1, 2026, compared to $87.6 million in the prior year, and deleveraged 710 bps to 36.5% of net sales.

Operating income (loss) was a loss of $(13.0) million in the three months ended August 1, 2026, compared to income of $4.1 million in the three months ended August 2, 2025 and deleveraged 680 bps to (5.4)% of net sales. Adjusted operating loss was $(10.9) million in the three months ended August 1, 2026, compared to Adjusted operating income of $6.1 million in the prior year, and deleveraged 650 bps to (4.5)% of net sales.

Net interest expense was $18.3 million in the three months ended August 1, 2026, compared to $8.0 million in the three months ended August 2, 2025. The increase was due to the amortization of financing costs associated with the monetization of our tariff refund claims and income tax receivable claim. Excluding the impact of these costs, net interest expense decreased $0.4 million due to lower average borrowings and interest rates on our debt facilities.

Provision (benefit) for income taxes was a benefit of $0.3 million in the three months ended August 1, 2026, compared to a provision of $1.5 million in the three months ended August 2, 2025. The change was primarily due to a higher pretax loss and changes in forecasted earnings mix.

Net loss was $(31.0) million, or $(1.39) per diluted share, in the three months ended August 1, 2026, compared to $(5.4) million, or $(0.24) per diluted share, in the three months ended August 2, 2025. Adjusted net loss was $(18.2) million, or $(0.82) per diluted share, compared to $(3.4) million, or $(0.15) per diluted share, in the prior year.

Fiscal Year-To-Date 2026 Results
Net sales decreased $83.1 million, or 15.4%, to $457.0 million in the six months ended August 1, 2026, compared to $540.1 million in the six months ended August 2, 2025. The decrease in net sales was driven by a decrease in DTC sales due to lower traffic. Comparable retail sales in our owned and operated DTC business decreased 12.9% for the six months ended August 1, 2026. Our consolidated results were also impacted by the planned reduction in shipments for our wholesale channel to align inventory positions with our customers, and to liquidate aged fashion inventories. These negative trends have started to reverse during the beginning of the third quarter as our wholesale partners build back their inventory levels ahead of the holiday season.

Gross profit decreased $35.4 million to $136.6 million in the six months ended August 1, 2026, compared to $172.1 million in the six months ended August 2, 2025. Gross margin decreased 200 bps to 29.9% during the six months ended August 1, 2026, compared to 31.9% in the prior year. Excluding the impact of tariff refunds recognized during the year amounting to $39 million, which was accounted for as a reduction of Cost of sales, our gross margin decreased 1,040 bps primarily due to a higher penetration of markdown sales (420 bps), higher tariffs on our product (350 bps), increased store occupancy costs due to new store openings (190 bps), and an increase in inventory reserves (170 bps), partially offset by favorable product mix and costs (190 bps). Adjusted gross profit decreased $30.8 million to $141.3 million in the six months ended August 1, 2026, compared to $172.1 million in the six months ended August 2, 2025. Adjusted gross margin decreased 100 bps to 30.9% during the six months ended August 1, 2026, compared to 31.9% in the prior year, inclusive of the impact of tariff refunds.

Selling, general, and administrative expenses increased $2.7 million to $178.9 million in the six months ended August 1, 2026, compared to $176.3 million in the six months ended August 2, 2025 and deleveraged 650 bps to 39.1% of net sales. The increase was primarily due to an increase in store expenses as we opened 20 new stores, combined with the impact of unfavorable foreign currency exchange movements, partially offset by a reduction in marketing expense as we continue to focus on rationalizing our spend, and a decrease in long-term incentive compensation. Adjusted selling, general, and administrative expenses were $175.8 million in the six months ended August 1, 2026, compared to $174.2 million in the prior year, and deleveraged 630 bps to 38.5% of net sales.

Operating loss was $(55.2) million in the six months ended August 1, 2026, compared to $(20.0) million in the six months ended August 2, 2025. Adjusted operating loss was $(47.1) million in the six months ended August 1, 2026, compared to $(17.9) million in the prior year.

Net interest expense was $27.9 million in the six months ended August 1, 2026, compared to $16.6 million in the six months ended August 2, 2025. The increase was due to the amortization of financing costs associated with the monetization of our tariff refund claims and income tax receivable claim. Excluding the impact of these costs, net interest expense decreased $1.0 million due to lower average borrowings and interest rates on our debt facilities.

Provision for income taxes was $1.0 million in the six months ended August 1, 2026, compared to $2.8 million during the six months ended August 2, 2025. The change was primarily due to a higher pretax loss and changes in forecasted earnings mix.

Net loss was $(84.1) million, or $(3.79) per diluted share, in the six months ended August 1, 2026, compared to $(39.4) million, or $(1.80) per diluted share, in the six months ended August 2, 2025. Adjusted net loss was $(62.6) million, or $(2.82) per diluted share, compared to $(36.3) million, or $(1.66) per diluted share, in the prior year.

Store Update
The Company opened 19 and closed 2 stores in the three months ended August 1, 2026, and ended the quarter with 514 stores, compared to 494 stores as of August 2, 2025.

Balance Sheet and Cash Flow
As of August 1, 2026, the Company had $7.2 million in cash and cash equivalents, $47.5 million in borrowing availability under its revolving credit facility, and an additional $25.0 million of availability under the unsecured Commitment Letter provided by Mithaq, representing total liquidity of $79.7 million. The Company had $160.1 million outstanding on its revolving credit facility. Additionally, the Company used $(32.3) million in operating cash flows (inclusive of tariff refunds) in the six months ended August 1, 2026, compared to $(73.4) million in the six months ended August 2, 2025.

Inventories were $340.2 million as of August 1, 2026, compared to $442.7 million as of August 2, 2025, reflecting a decrease of $102.5 million, or 23.2%. These reduced inventory levels were a result of improved inventory management as the Company continues to align its inventory levels with anticipated demand and sell through excess inventory on hand.

Non-GAAP Reconciliation
The Company’s results are reported in this press release on a GAAP and as adjusted, non-GAAP basis. Adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted gross profit, adjusted selling, general, and administrative expenses, and adjusted operating income (loss) are non-GAAP measures, and are not intended to replace GAAP financial information, and may be different from non-GAAP measures reported by other companies. The Company believes the income and expense items excluded as non-GAAP adjustments are not reflective of the performance of its core business, and that providing this supplemental disclosure to investors will facilitate comparisons of the past and present performance of its core business.

Please refer to the “Reconciliation of Non-GAAP Financial Information to GAAP” later in this press release, which sets forth the non-GAAP operating adjustments for the 13-week and 26-week periods ended August 1, 2026 and August 2, 2025.

About The Children’s Place
The Children’s Place is one of the only pure-play children’s specialty retailers in North America with an omni-channel presence. Its global retail and wholesale network includes two digital storefronts, 514 stores in North America, wholesale marketplaces and distribution in 13 countries through ten international franchise and wholesale partners. The Children’s Place designs, contracts to manufacture, and sells fashionable, high-quality, head-to-toe outfits predominantly at value prices, primarily under its proprietary brands: “The Children’s Place” and “Gymboree”. For more information, visit: www.childrensplace.com and www.gymboree.com.  

Forward-Looking Statements
This press release contains or may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and results of operations, including adjusted net income (loss) per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate,” “believe” and similar words, although some forward-looking statements are expressed differently.

These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially.

Some of these risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the “Part I, Item1A. Risk Factors” section of its annual report on Form 10-K for the fiscal year ended January 31, 2026.

Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unable to achieve operating results at levels sufficient to fund and/or finance the Company’s current level of operations and repayment of indebtedness, the risk that changes in trade policy and tariff regimes, including newly imposed U.S. tariffs and any responsive non-U.S. tariffs, may impact the Company’s international manufacturing and operations or customers’ discretionary spending habits, the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by changes in economic conditions (including inflation), the risk that changes in the Company’s plans and strategies with respect to pricing, capital allocation, capital structure, investor communications and/or operations may have a negative effect on the Company’s business, the risk that the Company’s strategic initiatives to increase sales and margin, improve operational efficiencies, enhance operating controls, decentralize operational authority and reshape the Company’s culture are delayed or do not result in anticipated improvements, the risk of delays, interruptions, disruptions and higher costs in the Company’s global supply chain, including resulting from disease outbreaks, foreign sources of supply in less developed countries, more politically unstable countries, or countries where vendors fail to comply with industry standards or ethical business practices, including the use of forced, indentured or child labor, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, various types of litigation, including class action litigation brought under securities, consumer protection, employment, and privacy and information security laws and regulations, risks related to the existence of a controlling stockholder, and the uncertainty of weather patterns, as well as other risks discussed in the Company’s filings with the SEC from time to time.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact:  Investor Relations (201) 558-2400 ext. 14500

⁽¹⁾ The tax effects of the non-GAAP items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides, adjusted for the impact of any valuation allowance.

* Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026.