SECAUCUS, N.J., June 12, 2026 (GLOBE NEWSWIRE) -- The Children’s Place, Inc. (Nasdaq: PLCE), one of the only pure-play children’s specialty retailers in North America with an omni-channel presence, today announced financial results for the Company’s first fiscal quarter ended May 2, 2026.

Muhammad Umair, President and Chief Executive Officer, said, “Today, we reported our first quarter results, which provide assurance that our strategies are beginning to take shape as we observed a reduction in the rate of sales declines versus the prior quarter and the same quarter last year, combined with material progress on our transformation efforts in a challenging retail environment. We recognize that our value customer has been impacted by higher gas and grocery prices. As a result, we are committed to clear messaging regarding the strength of our price/value offerings.”

Mr. Umair added, “While keeping our prices stable has narrowed our profit margins, further compounded by product cost headwinds from higher tariffs, we have filed for tariff refund claims amounting to approximately $40 million, which we expect to partially offset margin dilution during this fiscal year, and of which $5.5 million has already been received to date. Consistent with prior disclosures, we have monetized most of these claims at a discounted rate, by selling the future receipt of these funds to a purchaser. This sale has been recorded as a financing arrangement in the short-term debt section of our balance sheet. We did not record a receivable or P&L benefit for these refund claims during the first quarter.”

Mr. Umair continued, “We have added depth to our leadership team by bringing in significant retail expertise to navigate us through the next phase of our transformation journey. Our leaders are working together to move the company forward, and we are excited to announce the four new strategic priorities we are adopting to drive our long-term outlook.”

1) Improve Customer Experience Across All Channels by focusing on the target consumer; providing a strong price/value proposition; delivering compelling and convenient omni-channel experiences; and enhancing store and brand site environments.

2) Strengthen and Elevate the Brand by delivering appealing product that resonates with our customer; building a compelling, consistent brand narrative that drives awareness, consideration and desire; establishing a distinctive, ownable visual and creative identity across every customer touchpoint; and deepening relationships with existing customers by expanding and activating our current customer file.

3) Deliver on Financial Targets through strengthening financial performance by driving topline growth and profitability and improving liquidity; ensuring financial and operating plans are aligned with the business strategy and are executed with operational discipline, optimizing our product assortment and inventory management; and executing transformation initiatives effectively.

4) Organizational Leadership through building leadership capability and bench strength; strengthening decision-making and execution accountability; driving clear, consistent communication; and driving cultural engagement and performance alignment.

Mr. Umair added, “We believe these strategic priorities are critical to move our brand forward, providing a strong foundation for us to refocus on our customer, enhance our brand, and increase our profitability. Execution is now of utmost importance, and we will provide updates on a regular basis as to how we are tracking against these priorities.”

Mr. Umair concluded, “We continue to focus on cost reduction and driving operational efficiencies and have actioned on $45 million of gross annualized benefits toward our goal of $60 million by fiscal year 2027, partially offset by approximately $10 million to $15 million in recurring operating costs. As part of our transformation strategy, we accomplished a significant milestone this quarter by exiting our third-party distribution facility. This logistical shift will simplify our distribution execution, reduce costs in our supply chain, and is expected to yield approximately $10 million in annualized savings towards our target.”

First Quarter 2026 Results
Net sales decreased $26.9 million, or 11.1%, to $215.2 million in the three months ended May 2, 2026, compared to $242.1 million in the three months ended May 3, 2025. The decrease in net sales was driven by a decrease in direct-to-consumer (“DTC”) sales of 10.2% due to lower traffic compared to the prior year period, as we work to stabilize our customer file. Despite this, our DTC business experienced a sequential improvement in sales trends versus the fourth quarter of fiscal year 2025 of 40 basis points (“bps”) and an improvement in trend versus the prior year of 460 bps. Comparable retail sales in our owned and operated DTC business decreased 8.3% for the quarter. Our consolidated results were also impacted by the planned reduction in shipments in our wholesale channel as we continue to work with our customers to ensure inventories are aligned with demand. While our shipments to this channel were down in the first quarter, retail sales to the end consumer were flat to the prior year.

Gross profit decreased $17.4 million to $53.4 million in the three months ended May 2, 2026, compared to $70.8 million in the three months ended May 3, 2025. Gross margin decreased 440 bps to 24.8% during the three months ended May 2, 2026, compared to 29.2% in the prior year period. The decrease in gross margin was caused primarily by the impact of higher tariff costs on our product (360 bps), higher distribution costs due to a one-time charge to exit our third party distribution facility (170 bps) and a higher penetration of markdown sales and dilutions (140 bps), partially offset by favorable product mix (150 bps) and a reduction in inventory reserves (80 bps). Adjusted gross profit decreased $13.1 million to $57.6 million in the three months ended May 2, 2026, compared to $70.8 million in the three months ended May 3, 2025. Adjusted gross margin decreased 240 bps to 26.8% during the three months ended May 2, 2026, compared to 29.2% in the prior year period.

Selling, general, and administrative expenses were $88.9 million in the three months ended May 2, 2026, up 2.5% compared to $86.7 million in the three months ended May 3, 2025, and deleveraged 550 bps to 41.3% of net sales. The increase was primarily due to an increase in store expenses as we grow the store fleet. Adjusted selling, general, and administrative expenses were $87.4 million in the three months ended May 2, 2026, up 1.0% compared to $86.5 million in the comparable period last year, and deleveraged 490 bps to 40.6% of net sales.

Operating loss was $(42.2) million in the three months ended May 2, 2026, compared to $(24.1) million in the three months ended May 3, 2025 and deleveraged 960 bps to (19.6)% of net sales. Adjusted operating loss was $(36.1) million in the three months ended May 2, 2026, compared to $(24.0) million in the comparable period last year, and deleveraged 690 bps to (16.8)% of net sales.

Net interest expense was $9.7 million in the three months ended May 2, 2026, compared to $8.6 million in the three months ended May 3, 2025. The increase was due to the amortization of financing costs associated with the monetization of our tariff refund claims and income tax receivable claim, partially offset by lower average borrowings and interest rates on our debt facilities.

Provision for income taxes was $1.3 million in the three months ended May 2, 2026 and during the three months ended May 3, 2025.

Net loss was $(53.2) million, or $(2.40) per diluted share, in the three months ended May 2, 2026, compared to $(34.0) million, or $(1.57) per diluted share, in the three months ended May 3, 2025. Adjusted net loss was $(44.3) million, or $(2.00) per diluted share, compared to $(32.8) million, or $(1.52) per diluted share, in the comparable period last year.

Store Update 
The Company opened 1 and closed 2 stores in the three months ended May 2, 2026, and ended the quarter with 497 stores, compared to 495 stores as of May 3, 2025.

Balance Sheet and Cash Flow
As of May 2, 2026, the Company had $4.8 million in cash and cash equivalents, $38.0 million in borrowing availability under its revolving credit facility and an additional $40.0 million of availability under the unsecured Commitment Letter provided by Mithaq, representing total liquidity of $82.8 million. The Company had $150.0 million outstanding on its revolving credit facility and has not drawn down on its Mithaq credit facility. Additionally, the Company used $(53.8) million in operating cash flows in the three months ended May 2, 2026, compared to $(43.0) million in the three months ended May 3, 2025.

Inventories were $326.4 million as of May 2, 2026, compared to $422.2 million as of May 3, 2025. These reduced inventory levels were a result of improved inventory management as the Company continues to align its inventory levels with anticipated demand, and better balance the mix of fashion and basic product.

Non-GAAP Reconciliation
The Company’s results are reported in this press release on a GAAP and as adjusted, non-GAAP basis. Adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted gross profit, adjusted selling, general, and administrative expenses, and adjusted operating income (loss) are non-GAAP measures, and are not intended to replace GAAP financial information, and may be different from non-GAAP measures reported by other companies. The Company believes the income and expense items excluded as non-GAAP adjustments are not reflective of the performance of its core business, and that providing this supplemental disclosure to investors will facilitate comparisons of the past and present performance of its core business.

Please refer to the “Reconciliation of Non-GAAP Financial Information to GAAP” later in this press release, which sets forth the non-GAAP operating adjustments for the 13-week periods ended May 2, 2026 and May 3, 2025.

About The Children’s Place
The Children’s Place is one of the only pure-play children’s specialty retailers in North America with an omni-channel presence. Its global retail and wholesale network includes two digital storefronts, 497 stores in North America, wholesale marketplaces and distribution in 13 countries through nine international franchise and wholesale partners. The Children’s Place designs, contracts to manufacture, and sells fashionable, high-quality, head-to-toe outfits predominantly at value prices, primarily under its proprietary brands: “The Children’s Place” and “Gymboree”. For more information, visit: www.childrensplace.com and www.gymboree.com.

Forward-Looking Statements
This press release contains or may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and results of operations, including adjusted net income (loss) per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate,” “believe” and similar words, although some forward-looking statements are expressed differently.

These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially.

Some of these risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the “Part I, Item1A. Risk Factors” section of its annual report on Form 10-K for the fiscal year ended January 31, 2026.

Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unable to achieve operating results at levels sufficient to fund and/or finance the Company’s current level of operations and repayment of indebtedness, the risk that changes in trade policy and tariff regimes, including newly imposed U.S. tariffs and any responsive non-U.S. tariffs, may impact the Company’s international manufacturing and operations or customers’ discretionary spending habits, the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by changes in economic conditions (including inflation), the risk that changes in the Company’s plans and strategies with respect to pricing, capital allocation, capital structure, investor communications and/or operations may have a negative effect on the Company’s business, the risk that the Company’s strategic initiatives to increase sales and margin, improve operational efficiencies, enhance operating controls, decentralize operational authority and reshape the Company’s culture are delayed or do not result in anticipated improvements, the risk of delays, interruptions, disruptions and higher costs in the Company’s global supply chain, including resulting from disease outbreaks, foreign sources of supply in less developed countries, more politically unstable countries, or countries where vendors fail to comply with industry standards or ethical business practices, including the use of forced, indentured or child labor, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, various types of litigation, including class action litigation brought under securities, consumer protection, employment, and privacy and information security laws and regulations, risks related to the existence of a controlling stockholder, and the uncertainty of weather patterns, as well as other risks discussed in the Company’s filings with the SEC from time to time.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact: Investor Relations (201) 558-2400 ext. 14500

⁽¹⁾ The tax effects of the non-GAAP items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides, adjusted for the impact of any valuation allowance.

* Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026.