Children’s Place Inc.’s stock
PLCE,
tumbled 27% early Friday, after the children’s clothing chain issued a profit warning for the fourth quarter and said it’s working with lenders to secure new financing. In a filing with the Securities and Exchange Commission, the company said it would consider strategic alternatives if it’s unable to secure funds needed to support ongoing operations. Secaucus, N.J.-based Children’s Place said it now expects a fourth-quarter adjusted operation loss that will be equal to 9% to 8% of sales, after prior guidance for adjusted operating income of about 2% to 3% of sales. The loss “reflects the impact of lower than expected merchandise margin resulting from more aggressive promotions in an effort to maximize sales, higher than anticipated split shipments to meet customer e-commerce demand, and increased inventory valuation adjustments,” said the filing. The company expects sales to range from about $454 million to $456 million, compared with prior guidance of $460 million to $465 million. As of Feb. 3, liquidity stood at about 45 million. Total indebtedness is expected to fall by more than $100 million versus the third quarter of fiscal 2023 and as of Feb. 3 is expected to be about $277 million compared with $408 million as of end of third quarter. The stock has fallen 53% over the last 12 months, while the S&P 500 has gained 21%.
