Cover Page
Cover Page - shares | 6 Months Ended | |
Jul. 29, 2023 | Aug. 24, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 29, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-23071 | |
Entity Registrant Name | THE CHILDREN’S PLACE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 31-1241495 | |
Entity Address, Address Line One | 500 Plaza Drive | |
Entity Address, City or Town | Secaucus | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07094 | |
City Area Code | 201 | |
Local Phone Number | 558-2400 | |
Title of 12(b) Security | Common Stock, $0.10 par value | |
Trading Symbol | PLCE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,478,857 | |
Entity Central Index Key | 0001041859 | |
Current Fiscal Year End Date | --02-03 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Current assets: | |||
Cash and cash equivalents | $ 18,846 | $ 16,689 | $ 28,193 |
Accounts receivable | 33,073 | 49,584 | 44,445 |
Inventories | 536,980 | 447,795 | 616,436 |
Prepaid expenses and other current assets | 65,108 | 47,875 | 59,383 |
Total current assets | 654,007 | 561,943 | 748,457 |
Long-term assets: | |||
Property and equipment, net | 141,244 | 149,874 | 154,738 |
Right-of-use assets | 112,325 | 155,481 | 167,619 |
Tradenames, net | 70,491 | 70,891 | 71,292 |
Deferred income taxes | 35,798 | 36,616 | 20,013 |
Other assets | 9,220 | 11,476 | 12,339 |
Total assets | 1,023,085 | 986,281 | 1,174,458 |
Current liabilities: | |||
Revolving loan | 347,546 | 286,990 | 283,931 |
Accounts payable | 262,369 | 177,147 | 303,776 |
Current portion of operating lease liabilities | 65,266 | 78,576 | 78,989 |
Income taxes payable | 2,938 | 6,014 | 2,482 |
Accrued expenses and other current liabilities | 122,032 | 99,658 | 123,919 |
Total current liabilities | 800,151 | 648,385 | 793,097 |
Long-term liabilities: | |||
Long-term debt | 49,785 | 49,752 | 49,718 |
Long-term portion of operating lease liabilities | 63,714 | 96,482 | 112,386 |
Income taxes payable | 9,610 | 17,199 | 18,925 |
Other tax liabilities | 2,905 | 2,757 | 2,337 |
Other long-term liabilities | 10,990 | 13,228 | 13,814 |
Total liabilities | 937,155 | 827,803 | 990,277 |
Commitments and contingencies (see Note 8) | |||
Stockholders’ equity: | |||
Preferred stock, $1.00 par value, 1,000 shares authorized, 0 shares issued and outstanding | 0 | 0 | 0 |
Common stock, $0.10 par value, 100,000 shares authorized; 12,544, 12,292, and 13,087 issued; 12,473, 12,225, and 13,023 outstanding | 1,254 | 1,229 | 1,309 |
Additional paid-in capital | 145,117 | 150,956 | 151,954 |
Treasury stock, at cost (71, 67, and 64 shares) | (3,884) | (3,736) | (3,587) |
Deferred compensation | 3,884 | 3,736 | 3,587 |
Accumulated other comprehensive loss | (15,964) | (16,247) | (14,614) |
Retained earnings (deficit) | (44,477) | 22,540 | 45,532 |
Total stockholders’ equity | 85,930 | 158,478 | 184,181 |
Total liabilities and stockholders’ equity | $ 1,023,085 | $ 986,281 | $ 1,174,458 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value (in usd per share) | $ 1 | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.10 | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 12,544,000 | 12,292,000 | 13,087,000 |
Common stock, shares outstanding (in shares) | 12,473,000 | 12,225,000 | 13,023,000 |
Treasury stock (in shares) | 71,000 | 67,000 | 64,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 345,599 | $ 380,885 | $ 667,239 | $ 743,235 |
Cost of sales (exclusive of depreciation and amortization) | 257,840 | 265,422 | 483,019 | 485,867 |
Gross profit | 87,759 | 115,463 | 184,220 | 257,368 |
Selling, general, and administrative expenses | 111,965 | 114,672 | 224,895 | 223,708 |
Depreciation and amortization | 11,953 | 13,241 | 23,801 | 26,856 |
Asset impairment charges | 782 | 1,379 | 2,532 | 1,379 |
Operating income (loss) | (36,941) | (13,829) | (67,008) | 5,425 |
Interest expense | (7,658) | (2,603) | (13,594) | (4,313) |
Interest income | 17 | 14 | 51 | 19 |
Income (loss) before benefit for income taxes | (44,582) | (16,418) | (80,551) | 1,131 |
Benefit for income taxes | (9,227) | (3,120) | (16,363) | (5,402) |
Net income (loss) | $ (35,355) | $ (13,298) | $ (64,188) | $ 6,533 |
Earnings (loss) per common share | ||||
Basic (in usd per share) | $ (2.82) | $ (1.01) | $ (5.16) | $ 0.49 |
Diluted (in usd per share) | $ (2.82) | $ (1.01) | $ (5.16) | $ 0.48 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 12,522 | 13,147 | 12,448 | 13,384 |
Diluted (in shares) | 12,522 | 13,147 | 12,448 | 13,532 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net income (loss) | $ (35,355) | $ (13,298) | $ (64,188) | $ 6,533 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 1,101 | 54 | 283 | (428) |
Total comprehensive income (loss) | $ (34,254) | $ (13,244) | $ (63,905) | $ 6,105 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Deferred Compensation | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance (in shares) at Jan. 29, 2022 | 13,964 | ||||||
Beginning balance at Jan. 29, 2022 | $ 225,472 | $ 1,396 | $ 160,348 | $ 3,443 | $ 77,914 | $ (14,186) | $ (3,443) |
Beginning balance, treasury stock (in shares) at Jan. 29, 2022 | (61) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Vesting of stock awards (in shares) | 270 | ||||||
Vesting of stock awards | 0 | $ 27 | (27) | ||||
Stock-based compensation expense | 13,834 | 13,834 | |||||
Purchase and retirement of common stock (in shares) | (1,147) | ||||||
Purchase and retirement of common stock | (61,230) | $ (114) | (22,201) | (38,915) | |||
Other comprehensive (loss) income | (428) | (428) | |||||
Deferral of common stock into deferred compensation plan | 0 | 144 | $ (144) | ||||
Deferral of common stock into deferred compensation plan (in shares) | (3) | ||||||
Net income (loss) | $ 6,533 | 6,533 | |||||
Ending balance (in shares) at Jul. 30, 2022 | 13,023 | 13,087 | |||||
Ending balance at Jul. 30, 2022 | $ 184,181 | $ 1,309 | 151,954 | 3,587 | 45,532 | (14,614) | $ (3,587) |
Ending balance, treasury stock (in shares) at Jul. 30, 2022 | (64) | (64) | |||||
Beginning balance (in shares) at Apr. 30, 2022 | 13,422 | ||||||
Beginning balance at Apr. 30, 2022 | $ 213,684 | $ 1,342 | 155,097 | 3,512 | 71,913 | (14,668) | $ (3,512) |
Beginning balance, treasury stock (in shares) at Apr. 30, 2022 | (62) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Vesting of stock awards (in shares) | 147 | ||||||
Vesting of stock awards | 0 | $ 15 | (15) | ||||
Stock-based compensation expense | 6,272 | 6,272 | |||||
Purchase and retirement of common stock (in shares) | (482) | ||||||
Purchase and retirement of common stock | (22,531) | $ (48) | (9,400) | (13,083) | |||
Other comprehensive (loss) income | 54 | 54 | |||||
Deferral of common stock into deferred compensation plan | 0 | 75 | $ (75) | ||||
Deferral of common stock into deferred compensation plan (in shares) | (2) | ||||||
Net income (loss) | $ (13,298) | (13,298) | |||||
Ending balance (in shares) at Jul. 30, 2022 | 13,023 | 13,087 | |||||
Ending balance at Jul. 30, 2022 | $ 184,181 | $ 1,309 | 151,954 | 3,587 | 45,532 | (14,614) | $ (3,587) |
Ending balance, treasury stock (in shares) at Jul. 30, 2022 | (64) | (64) | |||||
Beginning balance (in shares) at Jan. 28, 2023 | 12,225 | 12,292 | |||||
Beginning balance at Jan. 28, 2023 | $ 158,478 | $ 1,229 | 150,956 | 3,736 | 22,540 | (16,247) | $ (3,736) |
Beginning balance, treasury stock (in shares) at Jan. 28, 2023 | (67) | (67) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Vesting of stock awards (in shares) | 455 | ||||||
Vesting of stock awards | $ 0 | $ 46 | (46) | ||||
Stock-based compensation benefit | (1,679) | (1,679) | |||||
Purchase and retirement of common stock (in shares) | (203) | ||||||
Purchase and retirement of common stock | (6,964) | $ (21) | (4,114) | (2,829) | |||
Other comprehensive (loss) income | 283 | 283 | |||||
Deferral of common stock into deferred compensation plan | 0 | 148 | $ (148) | ||||
Deferral of common stock into deferred compensation plan (in shares) | (4) | ||||||
Net income (loss) | $ (64,188) | (64,188) | |||||
Ending balance (in shares) at Jul. 29, 2023 | 12,473 | 12,544 | |||||
Ending balance at Jul. 29, 2023 | $ 85,930 | $ 1,254 | 145,117 | 3,884 | (44,477) | (15,964) | $ (3,884) |
Ending balance, treasury stock (in shares) at Jul. 29, 2023 | (71) | (71) | |||||
Beginning balance (in shares) at Apr. 29, 2023 | 12,473 | ||||||
Beginning balance at Apr. 29, 2023 | $ 125,821 | $ 1,247 | 150,846 | 3,810 | (9,207) | (17,065) | $ (3,810) |
Beginning balance, treasury stock (in shares) at Apr. 29, 2023 | (68) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Vesting of stock awards (in shares) | 119 | ||||||
Vesting of stock awards | 0 | $ 12 | (12) | ||||
Stock-based compensation benefit | (4,762) | (4,762) | |||||
Purchase and retirement of common stock (in shares) | (48) | ||||||
Purchase and retirement of common stock | (875) | $ (5) | (955) | 85 | |||
Other comprehensive (loss) income | 1,101 | 1,101 | |||||
Deferral of common stock into deferred compensation plan | 0 | 74 | $ (74) | ||||
Deferral of common stock into deferred compensation plan (in shares) | (3) | ||||||
Net income (loss) | $ (35,355) | (35,355) | |||||
Ending balance (in shares) at Jul. 29, 2023 | 12,473 | 12,544 | |||||
Ending balance at Jul. 29, 2023 | $ 85,930 | $ 1,254 | $ 145,117 | $ 3,884 | $ (44,477) | $ (15,964) | $ (3,884) |
Ending balance, treasury stock (in shares) at Jul. 29, 2023 | (71) | (71) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (64,188) | $ 6,533 |
Reconciliation of net income (loss) to net cash used in operating activities: | ||
Non-cash portion of operating lease expense | 37,757 | 40,075 |
Depreciation and amortization | 23,801 | 26,856 |
Non-cash stock-based compensation expense (benefit), net | (1,679) | 13,834 |
Asset impairment charges | 2,532 | 1,379 |
Deferred income tax provision | 828 | 2,768 |
Other non-cash charges (income), net | 331 | (521) |
Changes in operating assets and liabilities: | ||
Inventories | (88,959) | (187,762) |
Accounts receivable and other assets | 19,215 | (23,542) |
Prepaid expenses and other current assets | (798) | 554 |
Income taxes payable, net of prepayments | (23,334) | 8,008 |
Accounts payable and other current liabilities | 105,912 | 105,228 |
Lease liabilities | (41,886) | (47,928) |
Other long-term liabilities | (2,237) | 1,729 |
Net cash used in operating activities | (32,705) | (52,789) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (18,152) | (18,766) |
Change in deferred compensation plan | (109) | (357) |
Net cash used in investing activities | (18,261) | (19,123) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facility | 317,144 | 379,364 |
Repayments under revolving credit facility | (256,588) | (270,750) |
Purchase and retirement of common stock, including shares surrendered for tax withholdings and transaction costs | (6,964) | (62,900) |
Payment of debt issuance costs | (623) | 0 |
Net cash provided by financing activities | 52,969 | 45,714 |
Effect of exchange rate changes on cash and cash equivalents | 154 | (396) |
Net increase (decrease) in cash and cash equivalents | 2,157 | (26,594) |
Cash and cash equivalents, beginning of period | 16,689 | 54,787 |
Cash and cash equivalents, end of period | 18,846 | 28,193 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Net cash paid (received) for income taxes | 5,944 | (16,425) |
Cash paid for interest | 12,563 | 4,014 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | ||
Purchases of property and equipment not yet paid | $ 7,344 | $ 16,171 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jul. 29, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Description of Business The Children’s Place, Inc. and subsidiaries (collectively, the “Company”) is an omni-channel children’s specialty portfolio of brands with an industry-leading digital-first operating model. Its global retail and wholesale network includes four digital storefronts, more than 500 stores in North America, wholesale marketplaces and distribution in 16 countries through six international franchise partners. The Company designs, contracts to manufacture, and sells fashionable, high-quality apparel, accessories and footwear predominantly at value prices, primarily under the Company’s proprietary brands: “The Children’s Place”, “Gymboree”, “Sugar & Jade”, and “PJ Place”. The Company classifies its business into two segments: The Children’s Place U.S. and The Children’s Place International. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and revenue from its U.S.-based wholesale business. Included in The Children’s Place International segment are its Canadian-based stores, revenue from the Company’s Canadian-based wholesale business, as well as revenue from international franchisees. Each segment includes an e-commerce business located at www.childrensplace.com, www.gymboree.com, www.sugarandjade.com, and www.pjplace.com . The Company also has social media channels on Instagram, Facebook, X, formerly known as Twitter, YouTube and Pinterest. Terms that are commonly used in the notes to the Company’s consolidated financial statements are defined as follows: • Second Quarter 2023 — The thirteen weeks ended July 29, 2023 • Second Quarter 2022 — The thirteen weeks ended July 30, 2022 • Year-To-Date 2023 — The twenty-six weeks ended July 29, 2023 • Year-To-Date 2022 — The twenty-six weeks ended July 30, 2022 • Fiscal 2023 – The fifty-three weeks ending February 3, 2024 • Fiscal 2022 – The fifty-two weeks ended January 28, 2023 • SEC — U.S. Securities and Exchange Commission • U.S. GAAP — Generally Accepted Accounting Principles in the United States • FASB — Financial Accounting Standards Board • FASB ASC — FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants Basis of Presentation The unaudited consolidated financial statements and accompanying notes to consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. As of July 29, 2023, January 28, 2023 and July 30, 2022, the Company did not have any investments in unconsolidated affiliates. FASB ASC 810— Consolidation is considered when determining whether an entity is subject to consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the consolidated financial position of the Company as of July 29, 2023 and July 30, 2022, the results of its consolidated operations, consolidated comprehensive income (loss), and consolidated changes in stockholders’ equity for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022, and consolidated cash flows for the twenty-six weeks ended July 29, 2023 and July 30, 2022. The consolidated balance sheet as of January 28, 2023 was derived from audited financial statements. Due to the seasonal nature of the Company’s business, the results of operations for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 are not necessarily indicative of operating results for a full fiscal year. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023. Certain prior period financial statement disclosures have been conformed to the current period presentation. Fiscal Year The Company’s fiscal year is a fifty-two week or fifty-three week period ending on the Saturday on or nearest to January 31. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses reported during the period. Actual results could differ from the assumptions used and estimates made by management, which could have a material impact on the Company’s financial position or results of operations. Critical accounting estimates inherent in the preparation of the consolidated financial statements include impairment of long-lived assets, impairment of indefinite-lived intangible assets, income taxes, stock-based compensation, and inventory valuation. Recent Accounting Standards Updates There are no pending accounting standards updates that are currently expected to have a material impact on the Company’s consolidated financial statements. |
REVENUES
REVENUES | 6 Months Ended |
Jul. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The following table presents the Company’s revenues disaggregated by geography: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, July 30, July 29, July 30, (in thousands) Net sales: South $ 127,708 $ 146,368 $ 247,626 $ 282,740 Northeast 59,935 72,113 124,468 147,509 West 46,750 52,411 89,352 102,543 Midwest 34,093 39,218 72,902 82,831 International and other (1) 77,113 70,775 132,891 127,612 Total net sales $ 345,599 $ 380,885 $ 667,239 $ 743,235 ____________________________________________ (1) Includes retail and e-commerce sales in Canada and Puerto Rico, wholesale and franchisee sales, and certain amounts earned under the Company’s private label credit card program. The Company recognizes revenue, including shipping and handling fees billed to customers, upon purchase at the Company’s retail stores or when received by the customer if the product was purchased via e-commerce, net of coupon redemptions and anticipated sales returns. The Company deferred sales of $11.7 million, $2.9 million, and $12.6 million within Accrued expenses and other current liabilities as of July 29, 2023, January 28, 2023, and July 30, 2022, respectively, based upon estimated time of delivery, at which point control passes to the customer. Sales tax collected from customers is excluded from revenue. For its wholesale business, the Company recognizes revenue, including shipping and handling fees billed to customers, when title of the goods passes to the customer, net of commissions, discounts, operational chargebacks, and cooperative advertising. The allowance for wholesale revenue included within Accounts receivable was $7.4 million, $5.0 million, and $4.3 million as of July 29, 2023, January 28, 2023, and July 30, 2022, respectively. For the sale of goods to retail customers with a right of return, the Company recognizes revenue for the consideration it expects to be entitled to and calculates an allowance for estimated sales returns based upon the Company’s sales return experience. Adjustments to the allowance for estimated sales returns in subsequent periods have not been material based on historical data, thereby reducing the uncertainty inherent in such estimates. The allowance for estimated sales returns, which is recorded in Accrued expenses and other current liabilities, was $2.5 million, $1.0 million, and $2.3 million as of July 29, 2023, January 28, 2023, and July 30, 2022, respectively. The Company’s private label credit card is issued to customers for use exclusively at The Children’s Place stores and online at www.childrensplace.com, www.gymboree.com , www.sugarandjade.com, and www.pjplace.com, and credit is extended to such customers by a third-party financial institution on a non-recourse basis to the Company. The private label credit card includes multiple performance obligations for the Company, including marketing and promoting the program on behalf of the bank and the operation of the loyalty rewards program. Included in the agreement with the third-party financial institution was an upfront bonus paid to the Company and an additional bonus to extend the term of the agreement. These bonuses are recognized as revenue and allocated between brand and reward obligations. As the license of the Company’s brand is the predominant item in the performance obligation, the amount allocated to the brand obligation is recognized on a straight-line basis over the term of the agreement. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur. In measuring revenue and determining the consideration the Company is entitled to as part of a contract with a customer, the Company takes into account the related elements of variable consideration, such as additional bonuses, including profit-sharing, over the life of the private label credit card program. Similar to the upfront bonus, the usage-based royalties and bonuses are recognized as revenue and allocated between the brand and reward obligations. The amount allocated to the brand obligation is recognized on a straight-line basis over the initial term. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur. In addition, the annual profit-sharing amount is recognized quarterly within an annual period when it can be estimated reliably. The additional bonuses are amortized over the contract term based on anticipated progress against future targets and level of risk associated with achieving the targets. The Company has a points-based customer loyalty program in which customers earn points based on purchases and other promotional activities. These points can be redeemed for coupons to discount future purchases. A contract liability is estimated based on the standalone selling price of benefits earned by customers through the program and the related redemption experience under the program. The value of each point earned is recorded as deferred revenue and is included within Accrued expenses and other current liabilities. The total contract liabilities related to this program were $5.6 million, $2.6 million, and $3.9 million as of July 29, 2023, January 28, 2023, and July 30, 2022, respectively. The Company’s policy with respect to gift cards is to record revenue as and when the gift cards are redeemed for merchandise. The Company recognizes gift card breakage income in proportion to the pattern of rights exercised by the customer when the Company expects to be entitled to breakage and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recorded within Net sales. Prior to their redemption, gift cards are recorded as a liability within Accrued expenses and other current liabilities. The liability is estimated based on expected breakage that considers historical patterns of redemption. The gift card liability balance as of July 29, 2023, January 28, 2023, and July 30, 2022 was $10.2 million, $11.1 million, and $11.7 million, respectively. During Year-To-Date 2023, the Company recognized Net sales of $3.1 million related to the gift card liability balance that existed at January 28, 2023. |
RESTRUCTURING
RESTRUCTURING | 6 Months Ended |
Jul. 29, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In support of the Company’s ongoing structural transformation from a legacy store operating model to a digital-first retailer, during the Second Quarter 2023, the Company voluntarily entered into an early termination of its corporate office lease and implemented a workforce reduction. On May 26, 2023, the Company proactively accelerated the termination of its corporate office lease to capitalize on the prevailing tenant-favorable market conditions. That lease will now expire in May 2024. On June 28, 2023, the Company announced that it implemented a 17% reduction in the number of its salaried workforce, the substantial majority of whom were located at the Company’s corporate offices in Secaucus, New Jersey, with the balance at other domestic and international locations. The voluntary lease termination, combined with the workforce reduction, will enable the Company to reduce its current space configuration and capitalize on lower prevailing market rates than would have been applicable under its existing lease, which included escalations in occupancy costs, and did not expire until 2029. The actions associated with the workforce reduction are expected to be substantially completed by the end of the third quarter of 2023. As a result of these strategic actions associated with the voluntary early termination of its corporate office lease and workforce reduction, the Company incurred non-operating charges of $10.6 million in restructuring costs during the Second Quarter 2023 and Year-To-Date 2023 on a pre-tax basis, summarized in the following table: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, 2023 July 30, 2022 July 29, July 30, (in thousands) Employee-related costs $ 5,433 $ — $ 5,433 $ — Lease termination costs (1) 4,947 — 4,947 — Professional fees 186 — 186 — Total restructuring costs (2) $ 10,566 $ — $ 10,566 $ — ____________________________________________ (1) Includes $0.9 million of non-cash charges related to accelerated depreciation on certain assets in the corporate office over the reduced lease term. The Company expects to record additional accelerated depreciation charges of approximately $1.5 million until the expiration of its corporate office lease. (2) Restructuring costs are recorded within Selling, general and administrative expenses, except accelerated depreciation charges noted above, which are recorded within Depreciation and amortization, and are primarily recorded within The Children’s Place U.S. segment. The following table summarizes the restructuring costs that have been partially settled with cash payments and the remaining related liability as of July 29, 2023. The remaining related liability is expected to be settled with cash payments in the future and these costs are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets: Employee-Related Costs Lease Termination Costs Professional Fees Total (in thousands) Balance at April 29, 2023 $ — $ — $ — $ — Provision 5,433 4,040 186 9,659 Cash payments (2,602) (4,040) — (6,642) Balance at July 29, 2023 $ 2,831 $ — $ 186 $ 3,017 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jul. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS The Company’s intangible assets were as follows: July 29, 2023 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename (1) Indefinite $ 69,953 $ — $ 69,953 Crazy 8 tradename (1) 5 years 4,000 (3,462) 538 Total intangible assets $ 73,953 $ (3,462) $ 70,491 January 28, 2023 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename (1) Indefinite $ 69,953 $ — $ 69,953 Crazy 8 tradename (1) 5 years 4,000 (3,062) 938 Customer databases (2) 3 years 3,000 (3,000) — Total intangible assets $ 76,953 $ (6,062) $ 70,891 July 30, 2022 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename (1) Indefinite $ 69,953 $ — $ 69,953 Crazy 8 tradename (1) 5 years 4,000 (2,661) 1,339 Customer databases (2) 3 years 3,000 (3,000) — Total intangible assets $ 76,953 $ (5,661) $ 71,292 ____________________________________________ (1) Included within Tradenames, net on the Consolidated Balance Sheets. (2) Included within Other assets on the Consolidated Balance Sheets. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jul. 29, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: July 29, January 28, July 30, (in thousands) Property and equipment: Land and land improvements $ 3,403 $ 3,403 $ 3,403 Building and improvements 36,187 36,187 36,187 Material handling equipment 89,389 71,404 68,450 Leasehold improvements 178,536 196,302 195,342 Store fixtures and equipment 200,201 210,413 205,961 Capitalized software 347,343 336,336 333,967 Construction in progress 7,134 23,959 16,913 862,193 878,004 860,223 Less accumulated depreciation and amortization (720,949) (728,130) (705,485) Property and equipment, net $ 141,244 $ 149,874 $ 154,738 |
LEASES
LEASES | 6 Months Ended |
Jul. 29, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating leases for retail stores, corporate offices, distribution facilities, and certain equipment. The Company’s leases have remaining lease terms ranging from less than one year up to nine years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the lease early. The Company records all occupancy costs in Cost of sales, except costs for administrative office buildings, which are recorded in Selling, general, and administrative expenses. As of the periods presented, the Company’s finance leases were not material to the Consolidated Balance Sheets, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows. The following components of operating lease expense were recognized in the Company’s Consolidated Statements of Operations: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, 2023 July 30, 2022 July 29, July 30, (in thousands) Fixed operating lease cost $ 21,481 $ 24,070 $ 42,387 $ 47,040 Variable operating lease cost (1) 14,388 12,573 29,085 27,691 Total operating lease cost $ 35,869 $ 36,643 $ 71,472 $ 74,731 ____________________________________________ (1) Includes short term leases with lease periods of less than 12 months. As of July 29, 2023, the weighted-average remaining operating lease term was 3.2 years, and the weighted-average discount rate for operating leases was 5.2%. Cash paid for amounts included in the measurement of operating lease liabilities during Year-To-Date 2023 was $41.9 million. ROU assets obtained in exchange for new operating lease liabilities were $15.5 million during Year-To-Date 2023. As of July 29, 2023, the maturities of operating lease liabilities were as follows: July 29, (in thousands) Remainder of 2023 $ 46,940 2024 41,983 2025 16,132 2026 12,039 2027 9,394 Thereafter 12,866 Total operating lease payments 139,353 Less: imputed interest (10,373) Present value of operating lease liabilities $ 128,980 |
DEBT
DEBT | 6 Months Ended |
Jul. 29, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT On November 16, 2021, the Company completed the refinancing of its previous $360.0 million asset-based revolving credit facility and previous $80.0 million term loan with a new lending group led by an affiliate of Wells Fargo Bank, National Association (“Wells Fargo”) by entering into a fourth amendment to its credit agreement, dated as of May 9, 2019, with the lenders party thereto (as amended from time to time, the “Credit Agreement”). The refinanced debt consisted of a $350.0 million asset-based revolving credit facility (the “ABL Credit Facility”) and a $50.0 million term loan (the “Term Loan”). On June 5, 2023, the Company entered into a fifth amendment to its Credit Agreement, pursuant to which, among other things, (i) PNC Bank, National Association (“PNC Bank”) was added as a new lender, (ii) the ABL Credit Facility was increased to $445.0 million, (iii) the London InterBank Offered Rate (“LIBOR”) was replaced by the Secured Overnight Financing Rate (“SOFR”) as the interest rate benchmark, and (iv) the pricing grid for applicable margins on borrowings was updated. All other material terms and conditions of the Credit Agreement remained unchanged. ABL Credit Facility and Term Loan The Company and certain of its subsidiaries maintain the $445.0 million ABL Credit Facility and the $50.0 million Term Loan with Wells Fargo, Truist Bank, Bank of America, N.A., HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A., and PNC Bank as lenders (collectively, the “Lenders”) and Wells Fargo, as Administrative Agent, Collateral Agent, Swing Line Lender and Term Agent. Both the ABL Credit Facility and the Term Loan mature in November 2026. The ABL Credit Facility includes a $25.0 million Canadian sublimit and a $50.0 million sublimit for standby and documentary letters of credit. Under the ABL Credit Facility, based on the amount of the Company’s average daily excess availability under the facility, borrowings outstanding bear interest, at the Company’s option, at: (i) the prime rate per annum, plus a margin of 1.250% or 1.500%; or (ii) the SOFR per annum, plus a margin of 2.000% or 2.250%. The Company is charged a fee of 0.200% on the unused portion of the commitments. Letter of credit fees range from 1.000% to 1.125% for commercial letters of credit and range from 1.500% to 1.750% for standby letters of credit. Letter of credit fees are determined based on the amount of the Company’s average daily excess availability under the facility. The amount available for loans and letters of credit under the ABL Credit Facility is determined by a borrowing base consisting of certain credit card receivables, certain trade receivables, certain inventory, and the fair market value of certain real estate, subject to certain reserves. Once the Company achieves a consolidated EBITDA of at least $200.0 million across four consecutive fiscal quarters, and based on the amount of the Company’s average daily excess availability under the facility, borrowings outstanding under the ABL Credit Facility would bear interest, at the Company’s option, at: (i) the prime rate per annum, plus a margin of 0.625% or 0.875%; or (ii) the SOFR per annum, plus a margin of 1.375% or 1.625%. Letter of credit fees would range from 0.688% to 0.813% for commercial letters of credit and would range from 0.875% to 1.125% for standby letters of credit. Letter of credit fees are determined based on the amount of the Company’s average daily excess availability under the facility. For the Second Quarter 2023 and Year-To-Date 2023, the Company recognized $6.1 million and $10.8 million, respectively, in interest expense related to the ABL Credit Facility. For the Second Quarter 2022 and Year-To-Date 2022, the Company recognized $2.4 million and $3.9 million, respectively, in interest expense related to the ABL Credit Facility. The outstanding obligations under the ABL Credit Facility may be accelerated upon the occurrence of certain events, including, among others, non-payment, breach of covenants, the institution of insolvency proceedings, defaults under other material indebtedness, and a change of control, subject, in the case of certain defaults, to the expiration of applicable grace periods. The Company is not subject to any early termination fees. The ABL Credit Facility contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments, and a fixed-charge coverage ratio covenant, which only becomes effective in the event that borrowings and other uses of credit exceed $400.5 million (the “excess availability requirement”). These covenants also limit the ability of the Company and its subsidiaries to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, or dispositions or to change the nature of its business. Credit extended under the ABL Credit Facility is secured by a first priority security interest in substantially all of the Company’s U.S. and Canadian assets other than intellectual property, certain furniture, fixtures, equipment, and pledges of subsidiary capital stock, and a second priority security interest in the Company’s intellectual property, certain furniture, fixtures, equipment, and pledges of subsidiary capital stock. The table below presents the components of the Company’s ABL Credit Facility: July 29, January 28, July 30, (in millions) Total borrowing base availability $ 466.8 $ 404.2 $ 478.0 Credit facility maximum, net of the excess availability requirement, as applicable 400.5 315.0 350.0 Maximum borrowing availability (1) 400.5 315.0 350.0 Outstanding borrowings 347.5 287.0 283.9 Letters of credit outstanding—standby 7.4 7.4 7.4 Utilization of credit facility at end of period 354.9 294.4 291.3 Availability (2) $ 45.6 $ 20.6 $ 58.7 Interest rate at end of period 8.1% 5.9% 3.4% Year-To-Date 2023 Fiscal 2022 Year-To-Date 2022 (in millions) Average end of day loan balance during the period $ 315.2 $ 274.9 $ 268.2 Highest end of day loan balance during the period $ 379.4 $ 297.7 $ 297.6 Average interest rate 6.3% 3.7% 2.4% ____________________________________________ (1) Lower of the credit facility maximum, net of the excess availability requirement, and the total borrowing base availability. (2) The sub-limit availability for letters of credit was $42.6 million at July 29, 2023, January 28, 2023, and July 30, 2022. The Term Loan bears interest, payable monthly, at (a) the SOFR per annum plus 2.750% for any portion that is a SOFR loan, or (b) the base rate per annum plus 2.000% for any portion that is a base rate loan. The Term Loan is pre-payable at any time without penalty, and does not require amortization. For the Second Quarter 2023 and Year-To-Date 2023, the Company recognized $1.0 million, and $1.9 million, respectively, in interest expense related to the Term Loan. For the Second Quarter 2022 and Year-To-Date 2022, the Company recognized $0.5 million, and $0.8 million, respectively, in interest expense related to the Term Loan. The Term Loan is secured by a first priority security interest in the Company’s intellectual property, certain furniture, fixtures, equipment, and pledges of subsidiary capital stock, and a second priority security interest in the collateral securing the ABL Credit Facility on a first-priority basis. The Term Loan is guaranteed by each of the Company’s subsidiaries that guarantees the ABL Credit Facility and contains substantially the same covenants as provided in the ABL Credit Facility. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jul. 29, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company is a defendant in Rael v. The Children’s Place, Inc. , a purported class action, pending in the U.S. District Court, Southern District of California. In the initial complaint filed in February 2016, the plaintiff alleged that the Company falsely advertised discount prices in violation of California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. The plaintiff filed an amended complaint in April 2016, adding allegations of violations of other state consumer protection laws. In August 2016, the plaintiff filed a second amended complaint, adding an additional plaintiff and removing the other state law claims. The plaintiffs’ second amended complaint sought to represent a class of California purchasers and sought, among other items, injunctive relief, damages, and attorneys’ fees and costs. The Company engaged in mediation proceedings with the plaintiffs in December 2016 and April 2017. The parties reached an agreement in principle in April 2017, and signed a definitive settlement agreement in November 2017, to settle the matter on a class basis with all individuals in the U.S. who made a qualifying purchase at The Children’s Place from February 11, 2012 through January 28, 2020, the date of preliminary approval by the court of the settlement. The Company submitted its memorandum in support of final approval of the class settlement on March 2, 2021. On March 29, 2021, the court granted final approval of the class settlement and denied plaintiff’s motion for attorney’s fees, with the amount of attorney’s fees to be decided after the class recovery amount has been determined. The settlement provides merchandise vouchers for qualified class members who submit valid claims, as well as payment of legal fees and expenses and claims administration expenses. Vouchers were distributed to class members on November 15, 2021 and they will be eligible for redemption in multiple rounds through November 2023. In connection with the settlement, the Company recorded a reserve for $5.0 million in its consolidated financial statements in the first quarter of 2017. The Company is also involved in various legal proceedings arising in the normal course of business. In the opinion of management, any ultimate liability arising out of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jul. 29, 2023 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Share Repurchase Program In November 2021, the Board of Directors authorized a $250.0 million share repurchase program (the “Share Repurchase Program”). Under this program, the Company may repurchase shares on the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue the program at any time and may thereafter reinstitute purchases, all without prior announcement. As of July 29, 2023, there was $157.4 million remaining availability under the Share Repurchase Program. Pursuant to the Company’s practice, including due to restrictions imposed by the Company’s insider trading policy during black-out periods, the Company withholds and repurchases shares of vesting stock awards and makes payments to taxing authorities as required by law to satisfy the withholding tax requirements of all equity award recipients. The Company’s payment of the withholding taxes in exchange for the surrendered shares constitutes a repurchase of its common stock. The Company also acquires shares of its common stock in conjunction with liabilities owed under the Company’s deferred compensation plan, which are held in treasury. The following table summarizes the Company’s share repurchases: Twenty-six Weeks Ended July 29, 2023 July 30, 2022 Shares Amount Shares Amount (in thousands) Share repurchases related to: Share repurchase program 203 $ 6,964 1,147 $ 61,230 Shares acquired and held in treasury 4 $ 148 3 $ 144 In accordance with the FASB ASC 505—Equity, the par value of the shares retired is charged against Common stock and the remaining purchase price is allocated between Additional paid-in capital and Retained earnings (deficit). The portion charged against Additional paid-in capital is determined using a pro-rata allocation based on total shares outstanding. For all shares retired in Year-To-Date 2023 and Year-To-Date 2022, $2.8 million and $38.9 million was charged to Retained earnings (deficit), respectively. Dividends Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s Board of Directors based on a number of factors, including business and market conditions, the Company’s financial performance, and other investment priorities. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jul. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company generally grants time-vesting stock awards (“Deferred Awards”) and performance-based stock awards (“Performance Awards”) to employees at management levels. The Company also grants Deferred Awards to its non-employee directors. The following table summarizes the Company’s stock-based compensation expense (benefit): Thirteen Weeks Ended Twenty-six Weeks Ended July 29, July 30, July 29, July 30, (in thousands) Deferred Awards $ 1,690 $ 2,171 $ 4,190 $ 5,596 Performance Awards (1) (6,452) 4,101 (5,869) 8,238 Total stock-based compensation expense (benefit) (2) $ (4,762) $ 6,272 $ (1,679) $ 13,834 ____________________________________________ (1) Included within the Performance Awards benefit for the Second Quarter 2023 and Year-To-Date 2023 was a combination of ongoing expense associated with existing grants, and $6.7 million of credits resulting from (a) a change in estimate based on revised expectations of the attainment levels for performance metrics of certain awards, and (b) the reversal of unvested expense related to forfeited awards for employees no longer with the Company. |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 6 Months Ended |
Jul. 29, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE The following table reconciles net income (loss) and share amounts utilized to calculate basic and diluted earnings (loss) per common share: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, 2023 July 30, 2022 July 29, July 30, (in thousands) Net income (loss) $ (35,355) $ (13,298) $ (64,188) $ 6,533 Basic weighted average common shares outstanding 12,522 13,147 12,448 13,384 Dilutive effect of stock awards — — — 148 Diluted weighted average common shares outstanding 12,522 13,147 12,448 13,532 Anti-dilutive shares excluded from diluted earnings (loss) per common share calculation 74 77 151 — |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jul. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company computes income taxes using the liability method. This method requires recognition of deferred tax assets and liabilities, measured by enacted rates, attributable to temporary differences between the financial statement and income tax basis of assets and liabilities. The Company’s deferred tax assets and liabilities are comprised largely of differences relating to depreciation and amortization, rent expense, inventory, stock-based compensation, net operating loss carryforwards, tax credits, and various accruals and reserves. The Company’s effective income tax rate for the Second Quarter 2023 was a benefit of 20.7%, or $9.2 million, compared to 19.0%, or $3.1 million, during the Second Quarter 2022. The increase in the effective income tax rate and income tax benefit for the Second Quarter 2023 compared to the Second Quarter 2022 was primarily driven by the increase in the Second Quarter 2023 pretax loss compared to the pretax loss in the Second Quarter 2022 and the impact of nonrecurring items recognized in the Second Quarter 2023. The Company’s effective income tax rate for Year-To-Date 2023 was a benefit of 20.3%, or $16.4 million, compared to (477.6)%, or $5.4 million, for Year-To-Date 2022. The increase in the effective income tax rate for Year-To-Date 2023 compared to Year-To-Date 2022 was primarily driven by the Year-To-Date 2023 pretax loss as compared to near break-even pretax income for Year-To-Date 2022 and the release of a reserve in the first quarter of Fiscal 2022 of $6.4 million for unrecognized tax benefits as a result of a settlement with a taxing authority which was nonrecurring, partially offset by the impact of nonrecurring items recognized in the Second Quarter 2023. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act allows net operating losses (“NOLs”) incurred in taxable years 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to offset 100% of taxable income and to generate a refund of previously paid income taxes. Pursuant to the CARES Act, the Company carried back the taxable year 2020 tax loss of $150.0 million to prior years. During the first quarter of Fiscal 2022, the Company received $22.0 million of this income tax refund and the remaining balance of $19.1 million as of July 29, 2023 is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company accrues interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. The total amount of unrecognized tax benefits was $4.3 million, $3.6 million, and $2.3 million as of July 29, 2023, January 28, 2023, and July 30, 2022, respectively, and is included within long-term liabilities. Interest expense recognized in Year-To-Date 2023 and Year-To-Date 2022 related to unrecognized tax benefits was not significant. The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong. The Company files a consolidated U.S. income tax return for federal income tax purposes. The Company is no longer subject to income tax examinations by U.S. federal, state and local or foreign tax authorities for tax years 2016 and prior. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jul. 29, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION In accordance with FASB ASC 280— Segment Reporting , the Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place International. Each segment includes an e-commerce business located at www.childrensplace.com, www.gymboree.com, www.sugarandjade.com, and www.pjplace.com . Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and revenue from the Company’s U.S.-based wholesale business. Included in The Children’s Place International segment are the Company’s Canadian-based stores, revenue from the Company’s Canadian-based wholesale business, and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income before interest and taxes. Net sales and direct costs are recorded by each segment. Certain inventory procurement functions, such as production and design, as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services, are managed by The Children’s Place U.S. segment. Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place International segment based primarily on net sales. The assets related to these functions are not allocated. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales, and the Company has one wholesale customer that individually accounted for more than 10% of its net sales for the Second Quarter 2023. As of July 29, 2023, The Children’s Place U.S. had 525 stores and The Children’s Place International had 71 stores. As of July 30, 2022, The Children’s Place U.S. had 577 stores and The Children’s Place International had 81 stores. The following table provides segment level financial information: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, July 30, July 29, July 30, (in thousands) Net sales: The Children’s Place U.S. $ 313,217 $ 341,223 $ 606,703 $ 669,184 The Children’s Place International (1) 32,382 39,662 60,536 74,051 Total net sales $ 345,599 $ 380,885 $ 667,239 $ 743,235 Operating income (loss): The Children’s Place U.S. $ (36,739) $ (13,943) $ (64,766) $ 2,926 The Children’s Place International (202) 114 (2,242) 2,499 Total operating income (loss) $ (36,941) $ (13,829) $ (67,008) $ 5,425 Operating income (loss) as a percentage of net sales: The Children’s Place U.S. (11.7 %) (4.1) % (10.7%) 0.4% The Children’s Place International (0.6 %) 0.3 % (3.7%) 3.4% Total operating income (loss) as a percentage of net sales (10.7 %) (3.6) % (10.0%) 0.7% Depreciation and amortization: The Children’s Place U.S. $ 11,079 $ 12,261 $ 21,984 $ 24,848 The Children’s Place International 874 980 1,817 2,008 Total depreciation and amortization $ 11,953 $ 13,241 $ 23,801 $ 26,856 Capital expenditures: The Children’s Place U.S. $ 7,170 $ 7,612 $ 18,142 $ 17,969 The Children’s Place International — 431 10 797 Total capital expenditures $ 7,170 $ 8,043 $ 18,152 $ 18,766 ____________________________________________ (1) Net sales from The Children’s Place International are primarily derived from Canadian operations. The Company’s foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jul. 29, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements and accompanying notes to consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. As of July 29, 2023, January 28, 2023 and July 30, 2022, the Company did not have any investments in unconsolidated affiliates. FASB ASC 810— Consolidation is considered when determining whether an entity is subject to consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the consolidated financial position of the Company as of July 29, 2023 and July 30, 2022, the results of its consolidated operations, consolidated comprehensive income (loss), and consolidated changes in stockholders’ equity for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022, and consolidated cash flows for the twenty-six weeks ended July 29, 2023 and July 30, 2022. The consolidated balance sheet as of January 28, 2023 was derived from audited financial statements. Due to the seasonal nature of the Company’s business, the results of operations for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 are not necessarily indicative of operating results for a full fiscal year. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023. Certain prior period financial statement disclosures have been conformed to the current period presentation. |
Fiscal Year | Fiscal YearThe Company’s fiscal year is a fifty-two week or fifty-three week period ending on the Saturday on or nearest to January 31. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses reported during the period. Actual results could differ from the assumptions used and estimates made by management, which could have a material impact on the Company’s financial position or results of operations. Critical accounting estimates inherent in the preparation of the consolidated financial statements include impairment of long-lived assets, impairment of indefinite-lived intangible assets, income taxes, stock-based compensation, and inventory valuation. |
Recent Accounting Standards Updates | Recent Accounting Standards Updates There are no pending accounting standards updates that are currently expected to have a material impact on the Company’s consolidated financial statements. |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company’s revenues disaggregated by geography: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, July 30, July 29, July 30, (in thousands) Net sales: South $ 127,708 $ 146,368 $ 247,626 $ 282,740 Northeast 59,935 72,113 124,468 147,509 West 46,750 52,411 89,352 102,543 Midwest 34,093 39,218 72,902 82,831 International and other (1) 77,113 70,775 132,891 127,612 Total net sales $ 345,599 $ 380,885 $ 667,239 $ 743,235 ____________________________________________ (1) Includes retail and e-commerce sales in Canada and Puerto Rico, wholesale and franchisee sales, and certain amounts earned under the Company’s private label credit card program. |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | As a result of these strategic actions associated with the voluntary early termination of its corporate office lease and workforce reduction, the Company incurred non-operating charges of $10.6 million in restructuring costs during the Second Quarter 2023 and Year-To-Date 2023 on a pre-tax basis, summarized in the following table: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, 2023 July 30, 2022 July 29, July 30, (in thousands) Employee-related costs $ 5,433 $ — $ 5,433 $ — Lease termination costs (1) 4,947 — 4,947 — Professional fees 186 — 186 — Total restructuring costs (2) $ 10,566 $ — $ 10,566 $ — ____________________________________________ (1) Includes $0.9 million of non-cash charges related to accelerated depreciation on certain assets in the corporate office over the reduced lease term. The Company expects to record additional accelerated depreciation charges of approximately $1.5 million until the expiration of its corporate office lease. (2) Restructuring costs are recorded within Selling, general and administrative expenses, except accelerated depreciation charges noted above, which are recorded within Depreciation and amortization, and are primarily recorded within The Children’s Place U.S. segment. |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the restructuring costs that have been partially settled with cash payments and the remaining related liability as of July 29, 2023. The remaining related liability is expected to be settled with cash payments in the future and these costs are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets: Employee-Related Costs Lease Termination Costs Professional Fees Total (in thousands) Balance at April 29, 2023 $ — $ — $ — $ — Provision 5,433 4,040 186 9,659 Cash payments (2,602) (4,040) — (6,642) Balance at July 29, 2023 $ 2,831 $ — $ 186 $ 3,017 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The Company’s intangible assets were as follows: July 29, 2023 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename (1) Indefinite $ 69,953 $ — $ 69,953 Crazy 8 tradename (1) 5 years 4,000 (3,462) 538 Total intangible assets $ 73,953 $ (3,462) $ 70,491 January 28, 2023 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename (1) Indefinite $ 69,953 $ — $ 69,953 Crazy 8 tradename (1) 5 years 4,000 (3,062) 938 Customer databases (2) 3 years 3,000 (3,000) — Total intangible assets $ 76,953 $ (6,062) $ 70,891 July 30, 2022 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename (1) Indefinite $ 69,953 $ — $ 69,953 Crazy 8 tradename (1) 5 years 4,000 (2,661) 1,339 Customer databases (2) 3 years 3,000 (3,000) — Total intangible assets $ 76,953 $ (5,661) $ 71,292 ____________________________________________ (1) Included within Tradenames, net on the Consolidated Balance Sheets. (2) Included within Other assets on the Consolidated Balance Sheets. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consisted of the following: July 29, January 28, July 30, (in thousands) Property and equipment: Land and land improvements $ 3,403 $ 3,403 $ 3,403 Building and improvements 36,187 36,187 36,187 Material handling equipment 89,389 71,404 68,450 Leasehold improvements 178,536 196,302 195,342 Store fixtures and equipment 200,201 210,413 205,961 Capitalized software 347,343 336,336 333,967 Construction in progress 7,134 23,959 16,913 862,193 878,004 860,223 Less accumulated depreciation and amortization (720,949) (728,130) (705,485) Property and equipment, net $ 141,244 $ 149,874 $ 154,738 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Leases [Abstract] | |
Schedule of Lease, Cost | The following components of operating lease expense were recognized in the Company’s Consolidated Statements of Operations: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, 2023 July 30, 2022 July 29, July 30, (in thousands) Fixed operating lease cost $ 21,481 $ 24,070 $ 42,387 $ 47,040 Variable operating lease cost (1) 14,388 12,573 29,085 27,691 Total operating lease cost $ 35,869 $ 36,643 $ 71,472 $ 74,731 ____________________________________________ (1) Includes short term leases with lease periods of less than 12 months. |
Schedule of Lessee, Operating Lease, Liability, Maturity | As of July 29, 2023, the maturities of operating lease liabilities were as follows: July 29, (in thousands) Remainder of 2023 $ 46,940 2024 41,983 2025 16,132 2026 12,039 2027 9,394 Thereafter 12,866 Total operating lease payments 139,353 Less: imputed interest (10,373) Present value of operating lease liabilities $ 128,980 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | The table below presents the components of the Company’s ABL Credit Facility: July 29, January 28, July 30, (in millions) Total borrowing base availability $ 466.8 $ 404.2 $ 478.0 Credit facility maximum, net of the excess availability requirement, as applicable 400.5 315.0 350.0 Maximum borrowing availability (1) 400.5 315.0 350.0 Outstanding borrowings 347.5 287.0 283.9 Letters of credit outstanding—standby 7.4 7.4 7.4 Utilization of credit facility at end of period 354.9 294.4 291.3 Availability (2) $ 45.6 $ 20.6 $ 58.7 Interest rate at end of period 8.1% 5.9% 3.4% Year-To-Date 2023 Fiscal 2022 Year-To-Date 2022 (in millions) Average end of day loan balance during the period $ 315.2 $ 274.9 $ 268.2 Highest end of day loan balance during the period $ 379.4 $ 297.7 $ 297.6 Average interest rate 6.3% 3.7% 2.4% ____________________________________________ (1) Lower of the credit facility maximum, net of the excess availability requirement, and the total borrowing base availability. (2) The sub-limit availability for letters of credit was $42.6 million at July 29, 2023, January 28, 2023, and July 30, 2022. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Shares Repurchases | The following table summarizes the Company’s share repurchases: Twenty-six Weeks Ended July 29, 2023 July 30, 2022 Shares Amount Shares Amount (in thousands) Share repurchases related to: Share repurchase program 203 $ 6,964 1,147 $ 61,230 Shares acquired and held in treasury 4 $ 148 3 $ 144 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Company’s Stock-Based Compensation Expense | The following table summarizes the Company’s stock-based compensation expense (benefit): Thirteen Weeks Ended Twenty-six Weeks Ended July 29, July 30, July 29, July 30, (in thousands) Deferred Awards $ 1,690 $ 2,171 $ 4,190 $ 5,596 Performance Awards (1) (6,452) 4,101 (5,869) 8,238 Total stock-based compensation expense (benefit) (2) $ (4,762) $ 6,272 $ (1,679) $ 13,834 ____________________________________________ (1) Included within the Performance Awards benefit for the Second Quarter 2023 and Year-To-Date 2023 was a combination of ongoing expense associated with existing grants, and $6.7 million of credits resulting from (a) a change in estimate based on revised expectations of the attainment levels for performance metrics of certain awards, and (b) the reversal of unvested expense related to forfeited awards for employees no longer with the Company. |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Common Share | The following table reconciles net income (loss) and share amounts utilized to calculate basic and diluted earnings (loss) per common share: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, 2023 July 30, 2022 July 29, July 30, (in thousands) Net income (loss) $ (35,355) $ (13,298) $ (64,188) $ 6,533 Basic weighted average common shares outstanding 12,522 13,147 12,448 13,384 Dilutive effect of stock awards — — — 148 Diluted weighted average common shares outstanding 12,522 13,147 12,448 13,532 Anti-dilutive shares excluded from diluted earnings (loss) per common share calculation 74 77 151 — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | The following table provides segment level financial information: Thirteen Weeks Ended Twenty-six Weeks Ended July 29, July 30, July 29, July 30, (in thousands) Net sales: The Children’s Place U.S. $ 313,217 $ 341,223 $ 606,703 $ 669,184 The Children’s Place International (1) 32,382 39,662 60,536 74,051 Total net sales $ 345,599 $ 380,885 $ 667,239 $ 743,235 Operating income (loss): The Children’s Place U.S. $ (36,739) $ (13,943) $ (64,766) $ 2,926 The Children’s Place International (202) 114 (2,242) 2,499 Total operating income (loss) $ (36,941) $ (13,829) $ (67,008) $ 5,425 Operating income (loss) as a percentage of net sales: The Children’s Place U.S. (11.7 %) (4.1) % (10.7%) 0.4% The Children’s Place International (0.6 %) 0.3 % (3.7%) 3.4% Total operating income (loss) as a percentage of net sales (10.7 %) (3.6) % (10.0%) 0.7% Depreciation and amortization: The Children’s Place U.S. $ 11,079 $ 12,261 $ 21,984 $ 24,848 The Children’s Place International 874 980 1,817 2,008 Total depreciation and amortization $ 11,953 $ 13,241 $ 23,801 $ 26,856 Capital expenditures: The Children’s Place U.S. $ 7,170 $ 7,612 $ 18,142 $ 17,969 The Children’s Place International — 431 10 797 Total capital expenditures $ 7,170 $ 8,043 $ 18,152 $ 18,766 ____________________________________________ (1) Net sales from The Children’s Place International are primarily derived from Canadian operations. The Company’s foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | 6 Months Ended |
Jul. 29, 2023 country digital_storefront store partner segment | |
Accounting Policies [Abstract] | |
Number of digital storefronts | digital_storefront | 4 |
Number of stores (more than) | store | 500 |
Number of countries for distribution | country | 16 |
Number of international franchise partners | partner | 6 |
Number of reportable segments | segment | 2 |
REVENUES - Disaggregation by Ge
REVENUES - Disaggregation by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 345,599 | $ 380,885 | $ 667,239 | $ 743,235 |
South | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 127,708 | 146,368 | 247,626 | 282,740 |
Northeast | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 59,935 | 72,113 | 124,468 | 147,509 |
West | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 46,750 | 52,411 | 89,352 | 102,543 |
Midwest | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 34,093 | 39,218 | 72,902 | 82,831 |
International and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 77,113 | $ 70,775 | $ 132,891 | $ 127,612 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Accounts receivable reserve | $ 7.4 | $ 5 | $ 4.3 |
Allowance for credit loss | 2.5 | 1 | 2.3 |
Contract liability | 5.6 | 2.6 | 3.9 |
Accrued Expenses and Other Current Liabilities | |||
Disaggregation of Revenue [Line Items] | |||
Contract with customer, liability, current | 11.7 | 2.9 | 12.6 |
Gift Cards | |||
Disaggregation of Revenue [Line Items] | |||
Gift card liability | 10.2 | $ 11.1 | $ 11.7 |
Net sales | $ 3.1 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Oct. 28, 2023 | Jul. 29, 2023 | Jul. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 10,566 | $ 0 | $ 10,566 | $ 0 | |
Forecast | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected number of positions to be eliminated | 17% |
RESTRUCTURING - Restructuring C
RESTRUCTURING - Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 10,566 | $ 0 | $ 10,566 | $ 0 |
Employee-related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 5,433 | 0 | 5,433 | 0 |
Lease termination costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 4,947 | 0 | 4,947 | 0 |
Non-cash charges to accelerate depreciation | 900 | |||
Professional fees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 186 | $ 0 | $ 186 | $ 0 |
RESTRUCTURING - Restructuring R
RESTRUCTURING - Restructuring Reserves (Details) $ in Thousands | 3 Months Ended |
Jul. 29, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at April 29, 2023 | $ 0 |
Provision | 9,659 |
Cash payments | (6,642) |
Balance at July 29, 2023 | 3,017 |
Employee-related costs | |
Restructuring Reserve [Roll Forward] | |
Balance at April 29, 2023 | 0 |
Provision | 5,433 |
Cash payments | (2,602) |
Balance at July 29, 2023 | 2,831 |
Lease termination costs | |
Restructuring Reserve [Roll Forward] | |
Balance at April 29, 2023 | 0 |
Provision | 4,040 |
Cash payments | (4,040) |
Balance at July 29, 2023 | 0 |
Professional fees | |
Restructuring Reserve [Roll Forward] | |
Balance at April 29, 2023 | 0 |
Provision | 186 |
Cash payments | 0 |
Balance at July 29, 2023 | $ 186 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (3,462) | $ (6,062) | $ (5,661) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Total intangibles, net, Gross amount | 73,953 | 76,953 | 76,953 |
Total intangibles, net, Accumulated amortization | (3,462) | (6,062) | (5,661) |
Total intangible assets | 70,491 | 70,891 | 71,292 |
Crazy 8 tradename | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 69,953 | $ 69,953 | $ 69,953 |
Crazy 8 tradename | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 5 years | 5 years | 5 years |
Gross Amount | $ 4,000 | $ 4,000 | $ 4,000 |
Accumulated Amortization | (3,462) | (3,062) | (2,661) |
Net Amount | 538 | 938 | 1,339 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Total intangibles, net, Accumulated amortization | $ (3,462) | $ (3,062) | $ (2,661) |
Customer databases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 3 years | 3 years | |
Gross Amount | $ 3,000 | $ 3,000 | |
Accumulated Amortization | (3,000) | (3,000) | |
Net Amount | 0 | 0 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Total intangibles, net, Accumulated amortization | $ (3,000) | $ (3,000) |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 862,193 | $ 878,004 | $ 860,223 |
Less accumulated depreciation and amortization | (720,949) | (728,130) | (705,485) |
Property and equipment, net | 141,244 | 149,874 | 154,738 |
Land and land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,403 | 3,403 | 3,403 |
Building and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 36,187 | 36,187 | 36,187 |
Material handling equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 89,389 | 71,404 | 68,450 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 178,536 | 196,302 | 195,342 |
Store fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 200,201 | 210,413 | 205,961 |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 347,343 | 336,336 | 333,967 |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 7,134 | $ 23,959 | $ 16,913 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Asset impairment charges | $ 782 | $ 1,379 | $ 2,532 | $ 1,379 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 6 Months Ended |
Jul. 29, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Option to extend lease | 5 years |
Operating lease, weighted average remaining lease term | 3 years 2 months 12 days |
Operating lease, weighted average discount rate | 5.20% |
Operating lease, payments | $ 41.9 |
Right-of-use asset obtained in exchange for operating lease liability | $ 15.5 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 9 years |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Leases [Abstract] | ||||
Fixed operating lease cost | $ 21,481 | $ 24,070 | $ 42,387 | $ 47,040 |
Variable operating lease cost | 14,388 | 12,573 | 29,085 | 27,691 |
Total operating lease cost | $ 35,869 | $ 36,643 | $ 71,472 | $ 74,731 |
LEASES - Lease Liability Maturi
LEASES - Lease Liability Maturity (Details) $ in Thousands | Jul. 29, 2023 USD ($) |
Leases [Abstract] | |
Remainder of 2023 | $ 46,940 |
2024 | 41,983 |
2025 | 16,132 |
2026 | 12,039 |
2027 | 9,394 |
Thereafter | 12,866 |
Total operating lease payments | 139,353 |
Less: imputed interest | (10,373) |
Present value of operating lease liabilities | $ 128,980 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 05, 2023 | Nov. 16, 2021 | Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | Nov. 15, 2021 | |
Line of Credit Facility [Line Items] | |||||||
Interest expense | $ 7,658,000 | $ 2,603,000 | $ 13,594,000 | $ 4,313,000 | |||
Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt covenant, EBITDA target | $ 200,000,000 | ||||||
ABL Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest expense | 6,100,000 | 2,400,000 | 10,800,000 | 3,900,000 | |||
Debt Covenant, Trigger amount for stock buybacks and dividend payments | 400,500,000 | 400,500,000 | |||||
Secured Debt | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest expense | 1,000,000 | $ 500,000 | 1,900,000 | $ 800,000 | |||
Secured Debt | Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 80,000,000 | ||||||
Debt instrument, face amount | 50,000,000 | $ 50,000,000 | |||||
Secured Debt | Term Loan | Base Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2% | ||||||
Secured Debt | Term Loan | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.75% | ||||||
Revolving credit facility | ABL Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 445,000,000 | $ 350,000,000 | |||||
Unamortized balance of deferred financing costs | 2,300,000 | 2,300,000 | |||||
Revolving credit facility | ABL Credit Facility and the Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Unamortized balance of deferred financing costs | $ 2,600,000 | $ 2,600,000 | |||||
Revolving credit facility | Line of Credit | ABL Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 360,000,000 | ||||||
Unused line fee percentage | 0.20% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Minimum | Prime Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.25% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Minimum | Prime Rate | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 0.625% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Minimum | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Minimum | LIBOR | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.375% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Maximum | Prime Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.50% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Maximum | Prime Rate | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 0.875% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Maximum | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.25% | ||||||
Revolving credit facility | Line of Credit | ABL Credit Facility | Maximum | LIBOR | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.625% | ||||||
Canadian Credit Facility | Line of Credit | ABL Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||
Standby and Documentary Letters of Credit | Line of Credit | ABL Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||
Commercial Letter Of Credit | Line of Credit | ABL Credit Facility | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 1% | ||||||
Commercial Letter Of Credit | Line of Credit | ABL Credit Facility | Minimum | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 0.688% | ||||||
Commercial Letter Of Credit | Line of Credit | ABL Credit Facility | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 1.125% | ||||||
Commercial Letter Of Credit | Line of Credit | ABL Credit Facility | Maximum | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 0.813% | ||||||
Standby | Line of Credit | ABL Credit Facility | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 1.50% | ||||||
Standby | Line of Credit | ABL Credit Facility | Minimum | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 0.875% | ||||||
Standby | Line of Credit | ABL Credit Facility | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 1.75% | ||||||
Standby | Line of Credit | ABL Credit Facility | Maximum | Debt Condition One | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused line fee percentage | 1.125% |
DEBT - Components (Details)
DEBT - Components (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Apr. 29, 2023 | Jul. 29, 2023 | Jul. 30, 2022 | Jun. 05, 2023 | Jan. 28, 2023 | Nov. 16, 2021 | |
Line of Credit Facility [Line Items] | ||||||
Average end of day loan balance during the period | $ 274,900,000 | $ 315,200,000 | $ 268,200,000 | |||
Highest end of day loan balance during the period | $ 297,700,000 | $ 379,400,000 | $ 297,600,000 | |||
Average interest rate | 3.70% | 6.30% | 2.40% | |||
ABL Credit Facility and Previous ABL Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Outstanding borrowings | $ 347,500,000 | $ 283,900,000 | $ 287,000,000 | |||
Utilization of credit facility at end of period | 354,900,000 | 291,300,000 | 294,400,000 | |||
Availability | $ 45,600,000 | $ 58,700,000 | $ 20,600,000 | |||
Interest rate at end of period | 8.10% | 3.40% | 5.90% | |||
Revolving credit facility | ABL Credit Facility and Previous ABL Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Total borrowing base availability | $ 466,800,000 | $ 478,000,000 | $ 404,200,000 | |||
Credit facility maximum, net of the excess availability requirement, as applicable | 400,500,000 | 350,000,000 | 315,000,000 | |||
Revolving credit facility | ABL Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility maximum, net of the excess availability requirement, as applicable | $ 445,000,000 | $ 350,000,000 | ||||
Standby | ABL Credit Facility and Previous ABL Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Letters of credit outstanding—standby | 7,400,000 | 7,400,000 | 7,400,000 | |||
Sublimit Letter Of Credit | ABL Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Availability | $ 42,600,000 | $ 42,600,000 | $ 42,600,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Apr. 29, 2017 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency, estimate of possible loss | $ 5 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | Nov. 30, 2021 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchased and retired during period, value | $ 875,000 | $ 22,531,000 | $ 6,964,000 | $ 61,230,000 | |
Retained Earnings | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchased and retired during period, value | (85,000) | $ 13,083,000 | 2,829,000 | $ 38,915,000 | |
2018 Share Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 250,000,000 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 157,400,000 | $ 157,400,000 |
STOCKHOLDERS' EQUITY - (Share R
STOCKHOLDERS' EQUITY - (Share Repurchases) (Details) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
Stockholders' Equity Note [Abstract] | ||
Share repurchase program (in shares) | 203 | 1,147 |
Share repurchase program | $ 6,964 | $ 61,230 |
Shares acquired and held in treasury (in shares) | 4 | 3 |
Shares acquired and held in treasury | $ 148 | $ 144 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ (4,762) | $ 6,272 | $ (1,679) | $ 13,834 |
Cost of Sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | (500) | 300 | (100) | 900 |
Deferred Awards | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,690 | 2,171 | 4,190 | 5,596 |
Performance Awards | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | (6,452) | $ 4,101 | (5,869) | $ 8,238 |
Share-based payment arrangement, reversal and credits | $ 6,700 | $ 6,700 |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (35,355) | $ (13,298) | $ (64,188) | $ 6,533 |
Basic weighted average common shares outstanding (in shares) | 12,522 | 13,147 | 12,448 | 13,384 |
Dilutive effect of stock awards (in shares) | 0 | 0 | 0 | 148 |
Diluted weighted average common shares outstanding (in shares) | 12,522 | 13,147 | 12,448 | 13,532 |
Anti-dilutive shares excluded from diluted earnings (loss) per common share calculation (in shares) | 74 | 77 | 151 | 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Mar. 27, 2020 | Jul. 29, 2023 | Jul. 30, 2022 | Apr. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | Jan. 28, 2023 | |
Income Tax Disclosure [Abstract] | |||||||
Effective income tax rate reconciliation, percent | 20.70% | 19% | 20.30% | (477.60%) | |||
Income tax benefit | $ 9,227 | $ 3,120 | $ 16,363 | $ 5,402 | |||
Reserves for unrecognized tax benefits | 6,400 | ||||||
Estimated tax loss | $ 150,000 | ||||||
Proceeds from tax refunds | $ 22,000 | ||||||
Income taxes receivable | 19,100 | 19,100 | |||||
Unrecognized tax benefits | $ 4,300 | $ 2,300 | $ 4,300 | $ 2,300 | $ 3,600 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) - store | Jul. 29, 2023 | Jul. 30, 2022 |
Segment Reporting Information [Line Items] | ||
Number of Stores | 500 | |
The Children’s Place U.S. | ||
Segment Reporting Information [Line Items] | ||
Number of Stores | 525 | 577 |
The Children’s Place International | ||
Segment Reporting Information [Line Items] | ||
Number of Stores | 71 | 81 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 345,599 | $ 380,885 | $ 667,239 | $ 743,235 |
Operating income | $ (36,941) | $ (13,829) | $ (67,008) | $ 5,425 |
Operating income as a percent of net sales | (10.70%) | (3.60%) | (10.00%) | 0.70% |
Depreciation and amortization | $ 11,953 | $ 13,241 | $ 23,801 | $ 26,856 |
Capital expenditures | 7,170 | 8,043 | 18,152 | 18,766 |
Operating Segments | The Children’s Place U.S. | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 313,217 | 341,223 | 606,703 | 669,184 |
Operating income | $ (36,739) | $ (13,943) | $ (64,766) | $ 2,926 |
Operating income as a percent of net sales | (11.70%) | (4.10%) | (10.70%) | 0.40% |
Depreciation and amortization | $ 11,079 | $ 12,261 | $ 21,984 | $ 24,848 |
Capital expenditures | 7,170 | 7,612 | 18,142 | 17,969 |
Operating Segments | The Children’s Place International | International | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 32,382 | 39,662 | 60,536 | 74,051 |
Operating income | $ (202) | $ 114 | $ (2,242) | $ 2,499 |
Operating income as a percent of net sales | (0.60%) | 0.30% | (3.70%) | 3.40% |
Depreciation and amortization | $ 874 | $ 980 | $ 1,817 | $ 2,008 |
Capital expenditures | $ 0 | $ 431 | $ 10 | $ 797 |