By Sabela Ojea

Shares of Children's Place fell after the company reported a significant drop in comparable sales in the latest quarter and warned about the impact that President Trump's tariffs are expected to have on its margins.

The stock was down 6.3% to $6.78 in postmarket trading. Through Friday's close, shares have fallen 35% year to date.

The children's clothing retailer said that it expects margin pressure from tariffs. Executive Chairman Turki AlRajhi added that the company recently hired a head of sourcing to lead its supply chain response to tariffs, whose results aren't expected to be immediate.

"We are continuously assessing the effect of newly announced tariffs from various countries and aim to adjust our strategies to sell the current low-cost inventory effectively and wisely," AlRajhi said in a letter to shareholders. "As the sourcing cycle in retail companies requires considerable lead times, we expect it will take a few quarters before the results of these efforts are reflected."

The company imports the vast majority of its merchandise from China, Vietnam, Bangladesh, Ethiopia, Cambodia, Kenya and India, according to its latest annual report with the Securities and Exchange Commission.

Children's Place reported that sales for the three months ended Feb. 1 fell 10% to $408.6 million, beating the $380.8 million forecast by Wall Street, according to FactSet. The company's comparable retail sales dropped 15% on its planned decrease in e-commerce revenue as it sacrifices what it called unprofitable sales to improve profitability.

Last year Saudi Mithaq Capital, the AlRajhi family's Saudi Arabian investment firm, disclosed it took a 54% stake in the struggling retailer.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

April 11, 2025 18:39 ET (22:39 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.