Children’s Place Inc (NASDAQ:PLCE) shares are trading lower Monday morning after the company reported updated preliminary fourth-quarter results.
What Happened: Children’s Place said it now expects fourth-quarter net sales in a range of $454 million to $456 million versus prior guidance of $460 million at the low end. The company now expects a quarterly net loss of $52 million to $57 million, primarily due to a deterioration in gross margin that wasn’t anticipated when the company provided prior guidance.
Children’s Place said the main reason for the deterioration was a macro-economic environment that proved to be “far more challenging” for its core customers than it expected.
“As a result of this challenging environment and significantly higher input costs, including decade-high cotton costs and other supply chain costs, the Company made several forward-looking strategic decisions regarding the level and composition of its inventory, which negatively impacted short-term margins but significantly reduced higher cost, end-of-season merchandise, putting us in a much healthier inventory position as we enter 2023,” said Jane Elfers, president and CEO of Children’s Place.
Children’s Place will report its fourth-quarter results in March. The company said it will provide further commentary on the quarter and issue guidance for 2023 at that time.
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PLCE Price Action: Children’s Place has a 52-week high of $74.10 and a 52-week low of $29.20.
The stock was down 12.2% at $40.95 at time of publication, according to Benzinga Pro.
Photo: Terri Cnudde from Pixabay.
