Children's Place Q4 Highlights: Earnings Beat, Margin Pressure, Mixed Outlook & More
Children's Place Inc (NASDAQ: PLCE) reported a fourth-quarter FY22 sales decline of 10.2% year-over-year to $456.1 million, beating the consensus of $455.3 million.
The decrease in net sales was primarily due to the impact of permanent store closures, and a slowdown in consumer demand.
Comparable retail sales decreased 12.8% for the quarter. Adjusted EPS loss of $(3.87) beat the consensus of $(4.09).
Adjusted gross profit decreased to $79.7 million in Q4 from $193.9 million in the comparable period last year, and the margin fell 2,070 basis points to 17.5%.
Adjusted SG&A was $128.5 million (+8% Y/Y) and deleveraged 480 basis points to 28.2% of net sales.
Adjusted operating loss was $(61) million for the quarter, compared to adjusted operating income of $61.2 million last year.
The company closed 59 stores in the twelve months ended Jan. 28, 2023, and is now planning to close ~100 more stores, mostly in 2023.
PLCE ended the quarter with 613 stores and square footage of 2.9 million, a decrease of 8.3% Y/Y.
The company held $16.7 million in cash and equivalents and $287 million outstanding on its revolving credit facility as of Jan. 28, 2023.
Inventories were $447.8 million as of Jan. 28, 2023, compared to $428.8 million a year ago.
The company repurchased 371.5 thousand shares for ~$14 million during the quarter.
1Q23 Outlook: Children's Place sees net sales of $335 million-$345 million versus the consensus of $342.53 million.
It sees an adjusted net loss per share of $(1.60)-$(1.90) versus the consensus of $(1.21).
FY23 Outlook: Children's Place expects net sales of $1.62 billion-$1.66 billion versus the Street view of $1.71 billion.
It sees an adjusted operating margin of 3.5%-4.0% and adjusted EPS of $2.50-$3.00, below the consensus of $3.35.
Price Action: PLCE shares are trading higher by 4.46% at $43.01 on the last check Thursday.
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