The Children’s Place is on a path to replace its over-reliance on traditional retail revenue with a stronger focus on e-commerce. After suspending all store operations in the US and Canada due to the pandemic, the children’s wear company started reopening stores on May 19 in 10 states and restored the majority of its remaining stores during the last two weeks of June. As of August 1, it opened 771 of its 824 stores in the US, Canada and Puerto Rico, with the majority of the stores located in California.
The retailer permanently closed 98 stores in the three months ended August 1. It ended the quarter with 824 stores and square footage of 3.9 million, a decrease of 13.2 percent compared to the prior year. As of August 1, The Children’s Place had approximately $36.1 million in cash and cash equivalents with no long-term debt and $250.8 million outstanding on its revolving credit facility. The company used approximately $42.7 million in operating cash flow in the three months. Its net sales during the second quarter ended August 1 decreased by 12.3 percent to $368.9 million while digital sales increased 118 percent.
The company reported a net loss of $46.6 million during the three months compared to net income of $1.5 million in the year-ago quarter. Its gross profit fell by 51.7 percent to $67.1 million compared to gross profit of $138.8 million in the three months ended August 3, 2019. Adjusted gross profit was $93.8 million in the quarter compared to $138.8 million in the comparable period last year.