By Sabela Ojea
Children's Place reported lower revenue in the latest quarter and said that it expects margin pressure as a result of President Trump's tariff policies.
The Secaucus, N.J., children's apparel retailer on Friday posted a net loss for the three months ended Feb. 1 of $8 million, or 62 cents a share, compared with a loss of $128.8 million, or $10.24 a share, for the same period a year earlier.
Stripping out one-time items, the company's earnings per share came in at 75 cents a share. Analysts polled by FactSet had forecast adjusted earnings of 26 cents a share.
Sales dropped 10% to $408.6 million, beating the $380.8 million forecast by Wall Street, according to FactSet. Children's Place said that comparable retail sales dropped 15% on its planned decrease in e-commerce revenue, noting that the company is proactively sacrifices unprofitable sales to improve profitability.
Interim Chief Executive Muhammad Umair said that the company is determined to deliver profitable top-line sales in 2025 as it continues to refine its omni-channel strategy.
However, Umair said that potential tariffs could represent additional headwinds for the apparel sector, even if he sees a business opportunity in families increasingly looking for what he called "value-conscious" children clothes.
"We do expect margin pressure as a result, though we believe our existing country migration and diversification strategies have us well-positioned to partially offset potential impacts," Umair said. The company imports the vast majority of its merchandise from China, Vietnam, Bangladesh, Ethiopia, Cambodia, Kenya and India, according to its latest Securities and Exchange Commission report.
Last year Saudi Mithaq Capital, the AlRajhi family's Saudi Arabian investment firm, disclosed it took a 54% stake in the struggling retailer.
The firm has made major changes to its business through a restructuring and recently named a new finance chief.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
April 11, 2025 17:06 ET (21:06 GMT)
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