The Children’s Place, Inc. reported third‑quarter 2025 results on December 16, 2025, with net sales of $339.5 million, down 13.0 % from a year earlier. Operating income stood at $3.7 million, while the company posted a net loss of $4.3 million, translating to a diluted earnings loss of $0.19 per share against a prior‑year EPS of $1.57.
Gross margin fell to 33.1 %, a decline of 240 basis points, driven by a 140‑basis‑point increase in markdown sales, a 110‑basis‑point rise in inventory reserves, and a 50‑basis‑point impact from higher tariff costs. The decline reflects pricing pressure and higher cost inputs amid a weak retail environment.
Comparable brick‑and‑mortar sales grew 2 % versus a 5.4 % decline in overall comparable retail sales, underscoring a shift in channel mix. E‑commerce traffic was reported to have increased 5 %, but the figure is not corroborated by independent data. The company maintained its fiscal‑year guidance of $1.05 billion to $1.07 billion in net sales, a 4 % to 6 % decline from the prior year, and a gross margin outlook of 32 % to 33 %.
Management highlighted the impact of a transition to a new marketing agency and increased promotional spend on the quarter’s performance. CEO Muhammad Umair said the company was “experiencing challenges in the e‑commerce business” and that tariff pressures continued to weigh on margins. CFO John Szczepanski noted the refinancing of a $350 million asset‑based lending facility and a $100 million term loan, which increased liquidity by $35 million and added a $50 million benefit from the transformation initiative over three years.
The earnings miss and margin compression triggered a sharp market reaction, with the stock falling over 30 % in after‑hours trading. Investors cited the revenue shortfall, the negative earnings per share, and the net loss as primary drivers of the sell‑off, while the company’s guidance for the full year remained unchanged.
Looking forward, the company faces ongoing headwinds from macro‑economic softness, tariff uncertainty, and e‑commerce challenges, but it also pursues tailwinds through cost discipline, a transformation program, and a focus on opening new stores. The guidance signals continued caution, and the company’s liquidity position has been bolstered by the refinancing, though the net loss and margin pressure suggest that execution on the turnaround plan will remain a key focus for investors.
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