2024-02-14 13:30:47
The Children’s Place, en rojo. The American children’s fashion distribution giant reduces its sales forecast to between 454 million and 456 million dollars and expects a decrease in operating profit. The company, which in 2022 reduced its sales by 11% to 1,708 million dollars, went into the red that year, with losses of 1,138 million euros.
The company is working with its advisors, including Centerview Partners, along with potential lenders to secure new financing to sustain ongoing operations.
In addition, it is exploring “strategic alternatives” in case it is difficult to obtain new financing to “improve its liquidity position and strengthen its balance sheet to better position the company for the future,” according to the publication. Just Style.
The Children’s Place entered the red in 2022 with losses of 1,138 million euros
In the preliminary results presented by the company for the fourth quarter of 2023, closed at the end of January, the company reports net sales of approximately between 454 and 456 million dollars, compared to the previous forecast of 460 million and 465 million dollars .
Adjusted operating loss is expected to be in the range of 8% to 9% of net sales, compared to previous guidance for adjusted operating income of approximately 2% or 3%. This will exclude certain non-recurring costs, gain from settlement of a lawsuit, and impairment of non-monetary assets. Total liquidity as of February 3, 2024 is expected to be approximately $45 million.
The Children’s Place said the adjusted operating loss reflects several factors: lower-than-expected merchandise margins due to aggressive promotions aimed at driving sales, higher-than-expected split shipments to meet e-commerce demand and higher inventory valuation adjustments. .
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