What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-30 compared with 2022-08-26 · 107 added, 108 removed, 503 unchanged (30% of the section changed)

4 unchanged sentences

2022 January 29,

2022 July 31,

2022 October 30,

(unaudited) (unaudited)

16 unchanged sentences

Revolving loan $ 265,000 $ 175,318 $ 174,384

Current portion of long-term debt — — 28,270

Accounts payable 221,432 183,758 173,055

29 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Thirteen Weeks Ended Twenty-six Weeks Ended

2022 July 31,

2021 July 30,

2022 July 31,

(in thousands, except earnings (loss) per common share)

Thirteen Weeks Ended Thirty-nine Weeks Ended

2022 October 30,

2021 October 29,

2022 October 30,

(in thousands, except earnings per common share)

Net sales $ 509,120 $ 558,225 $ 1,252,355 $ 1,407,561

4 unchanged sentences

Asset impairment charges — 1,254 1,379 1,254

Operating income (loss) ( 13,829 ) 37,849 5,425 103,756

Operating income 57,837 113,810 63,261 217,566

Interest expense ( 3,810 ) ( 3,963 ) ( 8,123 ) ( 13,077 )

Interest income 24 4 43 11

Income (loss) before provision (benefit) for income taxes ( 16,418 ) 33,153 1,131 94,649

Provision (benefit) for income taxes ( 3,120 ) 9,058 ( 5,402 ) 25,349

Net income (loss) $ ( 13,298 ) $ 24,095 $ 6,533 $ 69,300

Earnings (loss) per common share

Income before provision for income taxes 54,051 109,851 55,181 204,500

Provision for income taxes 11,196 30,983 5,794 56,332

Net income $ 42,855 $ 78,868 $ 49,387 $ 148,168

Earnings per common share

Basic $ 3.28 $ 5.38 $ 3.72 $ 10.08

6 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Thirteen Weeks Ended Twenty-six Weeks Ended

2022 July 31,

2021 July 30,

2022 July 31,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Thirteen Weeks Ended Thirty-nine Weeks Ended

2022 October 30,

2021 October 29,

2022 October 30,

(in thousands)

Net income (loss) $ ( 13,298 ) $ 24,095 $ 6,533 $ 69,300

Net income $ 42,855 $ 78,868 $ 49,387 $ 148,168

Other comprehensive income (loss):

Foreign currency translation adjustment ( 2,397 ) 323 ( 2,825 ) 854

Total comprehensive income (loss) $ ( 13,244 ) $ 23,740 $ 6,105 $ 69,831

Total comprehensive income $ 40,458 $ 79,191 $ 46,562 $ 149,022

See accompanying notes to these consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Thirteen Weeks Ended July 30, 2022

Thirteen Weeks Ended October 29, 2022

Additional Other Total

1 unchanged sentence

(in thousands) Shares Amount Capital Compensation Earnings Loss Shares Amount Equity

Balance, April 30, 2022 13,422 $ 1,342 $ 155,097 $ 3,512 $ 71,913 $ ( 14,668 ) ( 62 ) $ ( 3,512 ) $ 213,684

Balance, July 30, 2022 13,087 $ 1,309 $ 151,954 $ 3,587 $ 45,532 $ ( 14,614 ) ( 64 ) $ ( 3,587 ) $ 184,181

Vesting of stock awards 9 1 ( 1 ) —

1 unchanged sentence

Purchase and retirement of common stock ( 434 ) ( 44 ) ( 8,628 ) ( 9,012 ) ( 17,684 )

Other comprehensive income 54 54

Other comprehensive loss ( 2,397 ) ( 2,397 )

Deferral of common stock into deferred compensation plan 74 ( 1 ) ( 74 ) —

Net loss ( 13,298 ) ( 13,298 )

Balance, July 30, 2022 13,087 $ 1,309 $ 151,954 $ 3,587 $ 45,532 $ ( 14,614 ) ( 64 ) $ ( 3,587 ) $ 184,181

Twenty-six Weeks Ended July 30, 2022

Net income 42,855 42,855

Balance, October 29, 2022 12,662 $ 1,266 $ 148,546 $ 3,661 $ 79,375 $ ( 17,011 ) ( 65 ) $ ( 3,661 ) $ 212,176

Thirty-nine Weeks Ended October 29, 2022

Additional Other Total

9 unchanged sentences

Net income 49,387 49,387

Balance, July 30, 2022

Balance, October 29, 2022

12,662 $ 1,266 $ 148,546 $ 3,661 $ 79,375 $ ( 17,011 ) ( 65 ) $ ( 3,661 ) $ 212,176

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Continued)

Thirteen Weeks Ended July 31, 2021

Thirteen Weeks Ended October 30, 2021

Additional Other Total

1 unchanged sentence

(in thousands) Shares Amount Capital Compensation Earnings Loss Shares Amount Equity

Balance, May 1, 2021 14,693 $ 1,469 $ 155,908 $ 3,234 $ 563 $ ( 12,930 ) ( 58 ) $ ( 3,234 ) $ 145,010

Balance, July 31, 2021 14,831 $ 1,483 $ 164,290 $ 3,304 $ 15,697 $ ( 13,285 ) ( 59 ) $ ( 3,304 ) $ 168,185

Vesting of stock awards 9 1 ( 1 ) —

1 unchanged sentence

Purchase and retirement of common stock ( 372 ) ( 37 ) ( 6,873 ) ( 24,812 ) ( 31,722 )

Other comprehensive loss ( 355 ) ( 355 )

Other comprehensive income 323 323

Deferral of common stock into deferred compensation plan 69 ( 1 ) ( 69 ) —

Net income 78,868 78,868

Balance, July 31, 2021 14,831 $ 1,483 $ 164,290 $ 3,304 $ 15,697 $ ( 13,285 ) ( 59 ) $ ( 3,304 ) $ 168,185

Twenty-six Weeks Ended July 31, 2021

Balance, October 30, 2021 14,468 $ 1,447 $ 164,010 $ 3,373 $ 69,753 $ ( 12,962 ) ( 60 ) $ ( 3,373 ) $ 222,248

Thirty-nine Weeks Ended October 30, 2021

Additional Retained Other Total

8 unchanged sentences

Net income 148,168 148,168

Balance, July 31, 2021 14,831 $ 1,483 $ 164,290 $ 3,304 $ 15,697 $ ( 13,285 ) ( 59 ) $ ( 3,304 ) $ 168,185

Balance, October 30, 2021 14,468 $ 1,447 $ 164,010 $ 3,373 $ 69,753 $ ( 12,962 ) ( 60 ) $ ( 3,373 ) $ 222,248

See accompanying notes to these consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Twenty-six Weeks Ended

2022 July 31,

Thirty-nine Weeks Ended

2022 October 30,

(in thousands)

1 unchanged sentence

Net income $ 49,387 $ 148,168

Reconciliation of net income to net cash used in operating activities:

Reconciliation of net income to net cash provided by (used in) operating activities:

Non-cash portion of operating lease expense 65,046 76,418

12 unchanged sentences

Other long-term liabilities 1,470 ( 244 )

Net cash used in operating activities ( 52,789 ) ( 3,297 )

Net cash provided by (used in) operating activities ( 16,965 ) 67,448

CASH FLOWS FROM INVESTING ACTIVITIES:

5 unchanged sentences

Repayments under revolving credit facility ( 465,701 ) ( 552,429 )

Repayment of term loan — ( 1,000 )

Purchase and retirement of common stock, including shares surrendered for tax withholdings and transaction costs ( 75,672 ) ( 45,187 )

Payment of debt issuance costs — ( 366 )

Net cash provided by financing activities 45,714 16,236

Net cash provided by (used in) financing activities 14,010 ( 41,948 )

Effect of exchange rate changes on cash and cash equivalents ( 974 ) ( 34 )

6 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Twenty-six Weeks Ended

2022 July 31,

Thirty-nine Weeks Ended

2022 October 30,

(in thousands)

11 unchanged sentences

and subsidiaries (collectively, the “Company”) is the largest pure-play children’s specialty apparel retailer in North America.

The Company provides apparel, footwear, accessories, and other items for children and ‘tweens.’ The Company designs, contracts to manufacture, sells at retail and wholesale, and licenses to sell trend right, high-quality merchandise predominantly at value prices, primarily under the Company’s proprietary “The Children’s Place”, “Place”, “Baby Place”, “Gymboree”, and “Sugar & Jade” brand names.

The Company classifies its business into two segments:

5 unchanged sentences

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, and www.sugarandjade.com .

Each segment includes an e-commerce business located at www.childrensplace.com, www.gymboree.com, www.sugarandjade.com, and www.pjplace.com .

Terms that are commonly used in the notes to the Company’s consolidated financial statements are defined as follows:

• Second Quarter 2022 — The thirteen weeks ended July 30, 2022

• Second Quarter 2021 — The thirteen weeks ended July 31, 2021

• Third Quarter 2022 — The thirteen weeks ended October 29, 2022

• Third Quarter 2021 — The thirteen weeks ended October 30, 2021

• First Quarter 2022 — The thirteen weeks ended April 30, 2022

• Year-To-Date 2022 — The twenty-six weeks ended July 30, 2022

• Year-To-Date 2021 — The twenty-six weeks ended July 31, 2021

• Year-To-Date 2022 — The thirty-nine weeks ended October 29, 2022

• Year-To-Date 2021 — The thirty-nine weeks ended October 30, 2021

• Fiscal 2022 – The fifty-two weeks ending January 28, 2023

13 unchanged sentences

Intercompany balances and transactions have been eliminated.

As of July 30, 2022, January 29, 2022, and July 31, 2021, the Company did not have any investments in unconsolidated affiliates.

As of October 29, 2022, January 29, 2022, and October 30, 2021, 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 adjustments necessary to present fairly the consolidated financial position of the Company as of July 30, 2022 and July 31, 2021, 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 30, 2022 and July 31, 2021, and consolidated cash flows for the twenty-six weeks ended July 30, 2022 and July 31, 2021.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of October 29, 2022 and October 30, 2021, the results of its consolidated operations, consolidated comprehensive income, and consolidated changes in stockholders’ equity for the thirteen and thirty-nine weeks ended October 29, 2022 and October 30, 2021, and consolidated cash flows for the thirty-nine weeks ended October 29, 2022 and October 30, 2021.

The consolidated balance sheet as of January 29, 2022 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 30, 2022 and July 31, 2021 are not necessarily indicative of operating results for a full fiscal year.

Due to the seasonal nature of the Company’s business, the results of operations for the thirteen and thirty-nine weeks ended October 29, 2022 and October 30, 2021 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 29, 2022.

12 unchanged sentences

The following table presents the Company’s revenues disaggregated by geography:

Thirteen Weeks Ended Twenty-six Weeks Ended

2022 July 31,

2021 July 30,

2022 July 31,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2022 October 30,

2021 October 29,

2022 October 30,

(in thousands)

9 unchanged sentences

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 $ 12.6 million, $ 3.6 million, and $ 9.5 million within Accrued expenses and other current liabilities as of July 30, 2022, January 29, 2022, and July 31, 2021, respectively, based upon estimated time of delivery, at which point control passes to the customer.

The Company deferred sales of $ 8.9 million, $ 3.6 million, and $ 8.8 million within Accrued expenses and other current liabilities as of October 29, 2022, January 29, 2022, and October 30, 2021, respectively, based upon estimated time of delivery, at which point control passes to the customer.

Sales tax collected from customers is excluded from revenue.

1 unchanged sentence

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 $ 2.3 million, $ 1.0 million, and $ 3.1 million as of July 30, 2022, January 29, 2022, and July 31, 2021, respectively.

The allowance for estimated sales returns, which is recorded in Accrued expenses and other current liabilities, was $ 2.2 million, $ 1.0 million, and $ 2.9 million as of October 29, 2022, January 29, 2022, and October 30, 2021, respectively.

THE CHILDREN’S PLACE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 , and www.sugarandjade.com, and credit is extended to such customers by a third-party financial institution on a non-recourse basis to the Company.

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.

13 unchanged sentences

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 $ 3.9 million, $ 5.0 million, and $ 7.1 million as of July 30, 2022, January 29, 2022, and July 31, 2021, respectively.

The total contract liabilities related to this program were $ 2.0 million, $ 5.0 million, and $ 6.0 million as of October 29, 2022, January 29, 2022, and October 30, 2021, respectively.

The Company’s policy with respect to gift cards is to record revenue as and when the gift cards are redeemed for merchandise.

3 unchanged sentences

The liability is estimated based on expected breakage that considers historical patterns of redemption.

The gift card liability balance as of July 30, 2022, January 29, 2022, and July 31, 2021 was $ 11.7 million, $ 12.1 million, and $ 12.8 million, respectively.

The gift card liability balance as of October 29, 2022, January 29, 2022, and October 30, 2021 was $ 11.2 million, $ 12.1 million, and $ 12.4 million, respectively.

During Year-To-Date 2022, the Company recognized Net sales of $ 4.5 million related to the gift card liability balance that existed at January 29, 2022.

7 unchanged sentences

The Company’s intangible assets were as follows:

July 30, 2022

October 29, 2022

Useful Life Gross Amount Accumulated Amortization Net Amount

20 unchanged sentences

Total intangibles $ 76,953 $ ( 5,088 ) $ 71,865

July 31, 2021

October 30, 2021

Useful Life Gross Amount Accumulated Amortization Net Amount

13 unchanged sentences

2022 January 29,

2022 July 31,

2022 October 30,

(in thousands)

10 unchanged sentences

Property and equipment, net $ 154,975 $ 155,006 $ 159,243

At July 30, 2022, January 29, 2022, and July 31, 2021, the Company reviewed its store related long-lived assets for indicators of impairment, and performed a recoverability test if indicators were identified.

Based on the results of the analyses performed, the Company recorded asset impairment charges in the Second Quarter 2022 and Year-To-Date 2022 of $ 1.4 million, inclusive of right-of-use (“ROU”) assets.

The Company did no t record asset impairment charges in the Second Quarter 2021 or Year-To-Date 2021.

At October 29, 2022, January 29, 2022, and October 30, 2021, the Company reviewed its store related long-lived assets for indicators of impairment, and performed a recoverability test if indicators were identified.

Based on the results of the analyses performed, no impairment charge was recorded in the Third Quarter 2022.

The Company recorded asset impairment charges during Year-To-Date 2022 of $ 1.4 million, inclusive of right-of-use (“ROU”) assets.

The Company recorded asset impairment charges of $ 1.3 million, inclusive of ROU assets, in the Third Quarter 2021 and Year-To-Date 2021.

THE CHILDREN’S PLACE, INC.

6 unchanged sentences

The following components of operating lease expense were recognized in the Company’s Consolidated Statements of Operations:

Thirteen Weeks Ended Twenty-six Weeks Ended

2022 July 31,

2021 July 30,

2022 July 31,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2022 October 30,

2021 October 29,

2022 October 30,

(in thousands)

4 unchanged sentences

____________________________________________

(1) Includes short term leases with lease periods of less than 12 months as well as lease abatements accounted for as reductions to variable lease costs under the COVID-19 expedient of $ 0.1 million and $ 2.3 million during the Second Quarter 2022 and Second Quarter 2021, and $ 0.9 million and $ 10.3 million during Year-To-Date 2022 and Year-To-Date 2021 , respectively.

As of July 30, 2022, the weighted-average remaining operating lease term was 4.3 years, and the weighted-average discount rate for operating leases was 4.9 %.

(1) Includes short term leases with lease periods of less than 12 months as well as lease abatements accounted for as reductions to variable lease costs under the COVID-19 expedient of $ 0.1 million and $ 0.7 million during the Third Quarter 2022 and Third Quarter 2021, respectively, and $ 1.0 million and $ 11.0 million during Year-To-Date 2022 and Year-To-Date 2021 , respectively.

As of October 29, 2022, the weighted-average remaining operating lease term was 3.9 years, and the weighted-average discount rate for operating leases was 5.0 %.

Cash paid for amounts included in the measurement of operating lease liabilities during Year-To-Date 2022 was $ 75.8 million.

ROU assets obtained in exchange for new operating lease liabilities were $ 38.8 million during Year-To-Date 2022.

As of July 30, 2022, the maturities of operating lease liabilities were as follows:

As of October 29, 2022, the maturities of operating lease liabilities were as follows:

(in thousands)

28 unchanged sentences

2022 January 29,

2022 July 31,

2022 October 30,

(in millions)

18 unchanged sentences

(1) Lower of the credit facility maximum or the total borrowing base collateral.

(2) The sub-limit availability for letters of credit was $ 42.6 million at July 30, 2022, January 29, 2022, and July 31, 2021.

(2) The sub-limit availability for letters of credit was $ 42.6 million at October 29, 2022, January 29, 2022, and October 30, 2021.

The Term Loan bears interest, payable monthly, at (a) the LIBOR Rate plus 2.50 % for any portion that is a LIBOR loan, or (b) the base rate plus 1.75 % 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 2022 and Year-To-Date 2022, the Company recognized $ 0.5 million and $ 0.8 million in interest expense related to the Term Loan.

For the Third Quarter 2022 and Year-To-Date 2022, the Company recognized $ 0.6 million and $ 1.5 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.

30 unchanged sentences

The Company may suspend or discontinue the programs at any time and may thereafter reinstitute purchases, all without prior announcement.

As of July 30, 2022, there was $ 196.1 million remaining under the 2021 Share Repurchase Program.

As of October 29, 2022, there was $ 178.4 million remaining under the 2021 Share Repurchase Program.

From March 2020 through July 2021, the Company suspended share repurchases, other than to satisfy withholding tax requirements of equity award recipients, due to the COVID-19 pandemic.

3 unchanged sentences

The following table summarizes the Company’s share repurchases:

Twenty-six Weeks Ended

July 30, 2022 July 31, 2021

Thirty-nine Weeks Ended

October 29, 2022 October 30, 2021

Shares Amount Shares Amount

16 unchanged sentences

The following table summarizes the Company’s stock-based compensation expense:

Thirteen Weeks Ended Twenty-six Weeks Ended

2022 July 31,

2021 July 30,

2022 July 31,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2022 October 30,

2021 October 29,

2022 October 30,

(in thousands)

4 unchanged sentences

____________________________________________

(1) Stock-based compensation expense recorded within Cost of sales (exclusive of depreciation and amortization) amounted to $ 0.3 million and $ 0.8 million in the Second Quarter 2022 and Second Quarter 2021, respectively, and $ 0.9 million and $ 1.7 million in the Year-To-Date 2022 and Year-To-Date 2021, respectively.

(1) Stock-based compensation expense recorded within Cost of sales (exclusive of depreciation and amortization) amounted to $ 0.3 million and $ 0.8 million in the Third Quarter 2022 and Third Quarter 2021, respectively, and $ 1.2 million and $ 2.5 million in Year-To-Date 2022 and Year-To-Date 2021, respectively.

All other stock-based compensation expense is included in Selling, general, and administrative expenses.

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

2022 July 31,

2021 July 30,

2022 July 31,

EARNINGS PER COMMON SHARE

The following table reconciles net income and share amounts utilized to calculate basic and diluted earnings per common share:

Thirteen Weeks Ended Thirty-nine Weeks Ended

2022 October 30,

2021 October 29,

2022 October 30,

(in thousands)

Net income (loss) $ ( 13,298 ) $ 24,095 $ 6,533 $ 69,300

Net income $ 42,855 $ 78,868 $ 49,387 $ 148,168

Basic weighted average common shares outstanding 13,064 14,668 13,277 14,706

Dilutive effect of stock awards 98 205 132 273

— 282 148 307

Diluted weighted average common shares outstanding 13,162 14,873 13,409 14,979

____________________________________________

(1) Because the Company incurred a net loss in the Second Quarter 2022, unvested stock awards are anti-dilutive and are therefore excluded from the calculation of diluted loss per common share for such period.

The Company computes income taxes using the liability method.

4 unchanged sentences

Pursuant to the CARES Act, the Company carried back the taxable year 2020 tax loss of approximately $ 150.0 million to prior years.

During the First Quarter 2022, the Company received $ 22.0 million of this

During the First Quarter 2022, the Company received $ 22.0 million of the related income tax refund and the remaining balance of $ 19.1 million as of October 29, 2022, is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

The Company’s effective income tax rate was a provision of 20.7 %, or $ 11.2 million for the Third Quarter 2022, compared to 28.2 %, or $ 31.0 million, for the Third Quarter 2021 and a provision of 10.5 %, or $ 5.8 million for Year-To-Date

THE CHILDREN’S PLACE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

income tax refund and the remaining balance of $ 19.1 million as of July 30, 2022, is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

The Company’s effective income tax rate for the Second Quarter 2022 was a benefit of 19.0 %, or $ 3.1 million, compared to a provision of 27.3 %, or $ 9.1 million, during the Second Quarter 2021.

The decrease in the effective income tax rate for the Second Quarter 2022 compared to the Second Quarter 2021 was primarily driven by a decrease in the forecasted effective income tax rate resulting from a favorable mix of income on forecasted earnings compared to the prior year and the impact of discrete items recognized in the Second Quarter 2022.

The Company’s effective income tax rate for Year-To-Date 2022 was a benefit of 477.6 %, or $ 5.4 million, compared to a provision of 26.8 %, or $ 25.3 million, for Year-To-Date 2021.

The effective income tax rate for Year-To-Date 2022 reflected the release of a reserve of $ 6.4 million for unrecognized tax benefits as a result of a settlement with a taxing authority in the First Quarter 2022.

2022, compared to 27.5 %, or $ 56.3 million, for Year-To-Date 2021.

The decrease in the effective income tax rate for the Third Quarter 2022, compared to the Third Quarter 2021 and Year-To-Date 2022, compared to Year-To-Date 2021 reflected a decrease in the forecasted effective income tax rate resulting from a favorable mix of income on forecasted earnings compared to the prior year.

The effective income tax rate for Year-To-Date 2022 also reflected the release of a reserve of $ 6.4 million for unrecognized tax benefits as a result of a settlement with a taxing authority in the First Quarter 2022.

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 $ 2.3 million, $ 8.7 million, and $ 8.0 million as of July 30, 2022, January 29, 2022, and July 31, 2021, respectively, and is included within long-term liabilities.

The amount of unrecognized tax benefits was $ 2.3 million, $ 8.7 million, and $ 8.0 million as of October 29, 2022, January 29, 2022, and October 30, 2021, respectively, and is included within long-term liabilities.

Additional interest expense recognized during Year-To-Date 2022 and Year-To-Date 2021 related to unrecognized tax benefits was not significant.

11 unchanged sentences

and The Children’s Place International.

Each segment includes an e-commerce business located at www.childrensplace.com, www.gymboree.com, and www.sugarandjade.com .

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.

9 unchanged sentences

Net sales to external customers are derived from merchandise sales, and the Company has no customers that individually account for more than 10% of its net sales.

As of July 30, 2022, The Children’s Place U.S.

As of October 29, 2022, The Children’s Place U.S.

had 577 stores and The Children’s Place International had 81 stores.

As of July 31, 2021, The Children’s Place U.S.

As of October 30, 2021, The Children’s Place U.S.

had 611 stores and The Children’s Place International had 92 stores.

3 unchanged sentences

The following tables provide segment level financial information:

Thirteen Weeks Ended Twenty-six Weeks Ended

2022 July 31,

2021 July 30,

2022 July 31,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2022 October 30,

2021 October 29,

2022 October 30,

(in thousands)

4 unchanged sentences

Total net sales $ 509,120 $ 558,225 $ 1,252,355 $ 1,407,561

Operating income (loss):

Operating income:

The Children’s Place U.S.

1 unchanged sentence

The Children’s Place International 6,377 13,354 8,876 21,304

Total operating income (loss) $ ( 13,829 ) $ 37,849 $ 5,425 $ 103,756

Operating income (loss) as a percentage of net sales:

Total operating income $ 57,837 $ 113,810 $ 63,261 $ 217,566

Operating income as a percentage of net sales:

The Children’s Place U.S.

1 unchanged sentence

The Children’s Place International 12.4 % 22.5 % 7.1 % 15.4 %

Total operating income (loss) as a percentage of net sales ( 3.6 %) 9.1 % 0.7 % 12.2 %

Total operating income as a percentage of net sales 11.4 % 20.4 % 5.1 % 15.5 %

Depreciation and amortization:

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements