Shares of specialty apparel provider The Children’s Place (NASDAQ:PLCE) are in a freefall today after its first-quarter numbers landed short of the Street’s expectations.
Revenue declined 11.2% year-over-year to $321.64 million, missing expectations by $16.8 million. Net loss per share at $2 too came in wider than the estimated $1.83 figure. The company is seeing gains in digital sales with site sales rising 100% and traffic rising over twofold year-over-year.
Nonetheless, its core customers are tightening their purse strings and the company’s comparable retail sales dropped 8.2% as a result, in Q1. Further, higher input costs led to a 920 basis point contraction in its gross margin.
Given the macroeconomic headwinds at present, PLCE has scaled back its financial outlook. For Q2, net sales are expected between $340 million and $345 million alongside a net loss per share in the range of $2.15 and $2.20.
For the full-year 2023, net sales are seen landing between $1.575 billion and $1.590 billion, indicating a drop in the high single digit as compared to the previous year. EPS for the year is anticipated between $1 and $1.5.
Today’s price drop comes on top of a 33.3% price erosion so far this year in PLCE shares. Further, short interest in the stock now stands at about 25%.
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