Children’s Place (NASDAQ:PLCE) weakened Monday after management cuts its outlook for the fourth quarter as it deals with a difficult macro environment. Children’s Place also said it expects a loss per share, citing “deterioration in gross margin.”
Preliminary fourth-quarter results showed net sales are expected to be approximately $454 million to $456 million, versus the Company’s prior guidance of $460 million at the low end, and down approximately $52 million to $54 million, or down approximately 10.2% to 10.6%, versus last year.
Q4 operating loss is expected to be in the range of (14.2%) to (15.6%) of net sales and adjusted operating loss is expected to be (13.4%) to (14.8%) after excluding approximately $3.6 million of adjustments, primarily related to store level asset impairments and fleet optimization costs to close certain retail locations, versus the previous guidance of adjusted operating income in the range of 2.5% to 3.3% of net sales.
Loss per share for the fourth quarter of 2022 is expected to be in the range of ($4.24) to ($4.63) and adjusted loss per share is expected to be in the range of ($4.02) to ($4.41) after excluding approximately $3.6 million of adjustments, as compared to the Company’s previous guidance of adjusted earnings per diluted share of $0.50 to $0.75.
According to CEO Jane Elfers, “We now expect to report a net loss in the range of ($52) million to ($57) million for the fourth quarter. This net loss was primarily due to a deterioration in gross margin for reasons not expected when we provided prior guidance…”
PLCE faded $5.86, or 12.6%, to $40.80.
