What changed in this filing

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Item 1. Financial Statements

2024-12-06 compared with 2024-09-11 · 180 added, 186 removed, 628 unchanged (37% of the section changed)

4 unchanged sentences

2024 February 3,

2024 July 29,

2024 October 28,

(in thousands, except par value)

47 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Thirteen Weeks Ended Twenty-six Weeks Ended

2024 July 29,

2023 August 3,

2024 July 29,

(in thousands, except loss per common share)

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

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

Net sales $ 390,173 $ 480,234 $ 977,706 $ 1,147,474

4 unchanged sentences

Asset impairment charges — 583 28,000 3,115

Operating loss ( 21,776 ) ( 36,941 ) ( 49,764 ) ( 67,008 )

Operating income (loss) 29,258 44,967 ( 20,506 ) ( 22,042 )

Related party interest expense ( 2,078 ) — ( 4,554 ) —

1 unchanged sentence

Interest income 14 17 39 68

Loss before provision (benefit) for income taxes ( 31,007 ) ( 44,582 ) ( 66,716 ) ( 80,551 )

Income (loss) before provision (benefit) for income taxes 19,180 37,028 ( 47,536 ) ( 43,523 )

Provision (benefit) for income taxes ( 900 ) ( 1,454 ) 2,293 ( 17,818 )

Net loss $ ( 32,114 ) $ ( 35,355 ) $ ( 69,909 ) $ ( 64,188 )

Loss per common share

Net income (loss) $ 20,080 $ 38,482 $ ( 49,829 ) $ ( 25,705 )

Earnings (loss) per common share

Basic $ 1.57 $ 3.07 $ ( 3.91 ) $ ( 2.06 )

6 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Thirteen Weeks Ended Twenty-six Weeks Ended

2024 July 29,

2023 August 3,

2024 July 29,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

(in thousands)

Net loss $ ( 32,114 ) $ ( 35,355 ) $ ( 69,909 ) $ ( 64,188 )

Net income (loss) $ 20,080 $ 38,482 $ ( 49,829 ) $ ( 25,705 )

Other comprehensive loss:

Foreign currency translation adjustment ( 282 ) ( 1,535 ) ( 1,021 ) ( 1,252 )

Total comprehensive loss $ ( 32,527 ) $ ( 34,254 ) $ ( 70,648 ) $ ( 63,905 )

Total comprehensive income (loss) $ 19,798 $ 36,947 $ ( 50,850 ) $ ( 26,957 )

See accompanying notes to these consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

Thirteen Weeks Ended August 3, 2024

Thirteen Weeks Ended November 2, 2024

Additional Other Total

1 unchanged sentence

(in thousands) Shares Amount Capital Compensation Deficit Loss Shares Amount (Deficit)

Balance, May 4, 2024 12,739 $ 1,274 $ 153,358 $ 2,957 $ ( 172,660 ) $ ( 16,822 ) ( 60 ) $ ( 2,957 ) $ ( 34,850 )

Balance, August 3, 2024 12,779 $ 1,278 $ 151,859 $ 2,975 $ ( 204,774 ) $ ( 17,235 ) ( 61 ) $ ( 2,975 ) $ ( 68,872 )

Vesting of stock awards — — — — — — — — —

Stock-based compensation benefit ( 1,248 ) ( 1,248 )

Purchase and retirement of common stock ( 21 ) ( 2 ) ( 245 ) ( 247 )

Stock-based compensation expense — — 21 — — — — — 21

Stock issuance costs — — ( 521 ) — — — — — ( 521 )

Other comprehensive loss — — — — — ( 282 ) — — ( 282 )

Deferral of common stock into deferred compensation plan 18 ( 1 ) ( 18 ) —

Net loss ( 32,114 ) ( 32,114 )

Balance, August 3, 2024 12,779 $ 1,278 $ 151,859 $ 2,975 $ ( 204,774 ) $ ( 17,235 ) ( 61 ) $ ( 2,975 ) $ ( 68,872 )

Twenty-six Weeks Ended August 3, 2024

Distribution of common stock from deferred compensation plan — — — ( 2,865 ) — — 58 2,865 —

Net income — — — — 20,080 — — — 20,080

Balance, November 2, 2024 12,779 $ 1,278 $ 151,359 $ 110 $ ( 184,694 ) $ ( 17,517 ) ( 3 ) $ ( 110 ) $ ( 49,574 )

Thirty-nine Weeks Ended November 2, 2024

Additional Other Total

6 unchanged sentences

Purchase and retirement of common stock ( 71 ) ( 7 ) ( 559 ) — — — — — ( 566 )

Stock issuance costs — — ( 521 ) — — — — — ( 521 )

Other comprehensive loss — — — — — ( 1,021 ) — — ( 1,021 )

Deferral of common stock into deferred compensation plan 66 ( 5 ) ( 66 ) —

Distribution of common stock from deferred compensation plan, net of deferrals — — — ( 2,799 ) — — 53 2,799 —

Net loss — — — — ( 49,829 ) — — — ( 49,829 )

Balance, August 3, 2024 12,779 $ 1,278 $ 151,859 $ 2,975 $ ( 204,774 ) $ ( 17,235 ) ( 61 ) $ ( 2,975 ) $ ( 68,872 )

Balance, November 2, 2024 12,779 $ 1,278 $ 151,359 $ 110 $ ( 184,694 ) $ ( 17,517 ) ( 3 ) $ ( 110 ) $ ( 49,574 )

See accompanying notes to these consolidated financial statements.

1 unchanged sentence

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

Thirteen Weeks Ended July 29, 2023

Additional Other Total

Common Stock Paid-In Deferred Accumulated Comprehensive Treasury Stock Stockholders’

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Thirteen Weeks Ended October 28, 2023

Additional Retained Other Total

Common Stock Paid-In Deferred Earnings Comprehensive Treasury Stock Stockholders’

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

Balance, April 29, 2023 12,473 $ 1,247 $ 150,846 $ 3,810 $ ( 9,207 ) $ ( 17,065 ) ( 68 ) $ ( 3,810 ) $ 125,821

Balance, July 29, 2023 12,544 $ 1,254 $ 145,117 $ 3,884 $ ( 44,477 ) $ ( 15,964 ) ( 71 ) $ ( 3,884 ) $ 85,930

Vesting of stock awards 7 1 ( 1 ) — — — — — —

1 unchanged sentence

Purchase and retirement of common stock ( 2 ) — ( 40 ) — ( 20 ) — — — ( 60 )

Other comprehensive income 1,101 1,101

Other comprehensive loss — — — — — ( 1,535 ) — — ( 1,535 )

Deferral of common stock into deferred compensation plan — — — 48 — — ( 2 ) ( 48 ) —

Net loss ( 35,355 ) ( 35,355 )

Balance, July 29, 2023 12,544 $ 1,254 $ 145,117 $ 3,884 $ ( 44,477 ) $ ( 15,964 ) ( 71 ) $ ( 3,884 ) $ 85,930

Twenty-six Weeks Ended July 29, 2023

Additional Other Total

Common Stock Paid-In Deferred Accumulated Comprehensive Treasury Stock Stockholders’

Net income — — — — 38,482 — — — 38,482

Balance, October 28, 2023 12,549 $ 1,255 $ 140,330 $ 3,932 $ ( 6,015 ) $ ( 17,499 ) ( 73 ) $ ( 3,932 ) $ 118,071

Thirty-nine Weeks Ended October 28, 2023

Additional Retained Other Total

Common Stock Paid-In Deferred Earnings Comprehensive Treasury Stock Stockholders’

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

3 unchanged sentences

Purchase and retirement of common stock ( 205 ) ( 21 ) ( 4,155 ) — ( 2,850 ) — — — ( 7,026 )

Other comprehensive income 283 283

Other comprehensive loss — — — — — ( 1,252 ) — — ( 1,252 )

Deferral of common stock into deferred compensation plan — — — 196 — — ( 6 ) ( 196 ) —

Net loss — — — — ( 25,705 ) — — — ( 25,705 )

Balance, July 29, 2023 12,544 $ 1,254 $ 145,117 $ 3,884 $ ( 44,477 ) $ ( 15,964 ) ( 71 ) $ ( 3,884 ) $ 85,930

Balance, October 28, 2023 12,549 $ 1,255 $ 140,330 $ 3,932 $ ( 6,015 ) $ ( 17,499 ) ( 73 ) $ ( 3,932 ) $ 118,071

See accompanying notes to these consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Twenty-six Weeks Ended

2024 July 29,

Thirty-nine Weeks Ended

2024 October 28,

(in thousands)

28 unchanged sentences

Payment of debt issuance costs ( 5,133 ) ( 623 )

Payment of stock issuance costs ( 521 ) —

Net cash provided by financing activities 248,040 64,042

Effect of exchange rate changes on cash and cash equivalents ( 1,090 ) ( 35 )

Net (decrease) increase in cash and cash equivalents ( 4,066 ) 2,157

Net decrease in cash and cash equivalents ( 7,890 ) ( 3,167 )

Cash and cash equivalents, beginning of period 13,639 16,689

13 unchanged sentences

and its subsidiaries (collectively, the “Company”) operate an omni-channel children’s specialty portfolio of brands.

Its global retail and wholesale network includes two digital storefronts, more than 500 stores in North America, wholesale marketplaces and distribution in 15 countries through five international franchise partners.

The Company designs, contracts to manufacture, and sells fashionable, high-quality apparel, accessories and footwear predominantly at value prices, primarily under the Company’s proprietary brands:

10 unchanged sentences

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

• Third Quarter 2024 — The thirteen weeks ended November 2, 2024

• Third Quarter 2023 — The thirteen weeks ended October 28, 2023

• Second Quarter 2024 — The thirteen weeks ended August 3, 2024

• Second Quarter 2023 — The thirteen weeks ended July 29, 2023

• First Quarter 2024 — The thirteen weeks ended May 4, 2024

• Year-To-Date 2024 — The twenty-six weeks ended August 3, 2024

• Year-To-Date 2023 — The twenty-six weeks ended July 29, 2023

• Year-To-Date 2024 — The thirty-nine weeks ended November 2, 2024

• Year-To-Date 2023 — The thirty-nine weeks ended October 28, 2023

• Fiscal 2024 — The fifty-two weeks ending February 1, 2025

14 unchanged sentences

Intercompany balances and transactions have been eliminated.

As of August 3, 2024, February 3, 2024 and July 29, 2023, the Company did not have any investments in unconsolidated affiliates.

As of November 2, 2024, February 3, 2024 and October 28, 2023, 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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the consolidated financial position of the Company as of August 3, 2024 and July 29, 2023, the results of its consolidated operations, consolidated comprehensive loss, and consolidated changes in stockholders’ (deficit) equity for the thirteen weeks and twenty-six weeks ended August 3, 2024 and July 29, 2023, and consolidated cash flows for the twenty-six weeks ended August 3, 2024 and July 29, 2023.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the consolidated financial position of the Company as of November 2, 2024 and October 28, 2023, the results of its consolidated operations, consolidated comprehensive income (loss), and consolidated changes in stockholders’ (deficit) equity for the thirteen weeks and thirty-nine weeks ended November 2, 2024 and October 28, 2023, and consolidated cash flows for the thirty-nine weeks ended November 2, 2024 and October 28, 2023.

The consolidated balance sheet as of February 3, 2024 was derived from audited financial statements.

Due to the seasonal nature of the Company’s business, the results of operations for the thirteen weeks and twenty-six weeks ended August 3, 2024 and July 29, 2023 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 weeks and thirty-nine weeks ended November 2, 2024 and October 28, 2023 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 February 3, 2024.

Certain prior period financial statement disclosures have been conformed to the current period presentation.

The Company incurred net losses in the Second Quarter 2024, Fiscal 2023 and Fiscal 2022.

As of August 3, 2024, the Company had an Accumulated deficit of $ 204.8 million and a working capital deficit of $ 71.2 million, which included borrowings of $ 316.7 million under its asset-based revolving credit facility (the “ABL Credit Facility”), which will mature in November 2026, pursuant to its credit agreement, dated as of May 9, 2019, (as amended from time to time, the “Credit Agreement”), by and among the Company, certain of its subsidiaries and the lenders party thereto.

As of August 3, 2024, the Company had availability under its ABL Credit Facility of $ 67.3 million.

The Company also has access to a senior unsecured credit facility of up to $ 40.0 million (the “Mithaq Credit Facility”), pursuant to a commitment letter, dated as of May 2, 2024, entered into between the Company and its majority shareholder, Mithaq Capital SPC, a Cayman segregated portfolio company (“Mithaq”).

The Company incurred net losses during Year-To-Date 2024, and in Fiscal 2023 and Fiscal 2022.

As of November 2, 2024, the Company had an Accumulated deficit of $ 184.7 million and a working capital deficit of $ 46.3 million, which included borrowings of $ 362.4 million under its asset-based revolving credit facility (the “ABL Credit Facility”), which will mature in November 2026, pursuant to its credit agreement, dated as of May 9, 2019, (as amended from time to time, the “Credit Agreement”), by and among the Company, certain of its subsidiaries and the lenders party thereto.

As of November 2, 2024, the Company had availability under its ABL Credit Facility of $ 48.3 million.

The Mithaq Credit Facility will be available to draw on at any time prior to July 1, 2026 to augment the Company’s liquidity position, if needed.

The Company plans to address its ongoing liquidity needs with additional financing as necessary, including but not limited to a future rights offering that the Company is currently contemplating.

The Company has determined that its existing cash on hand, expected cash generated from operations, and availability under its ABL Credit Facility and the Mithaq Credit Facility, will be sufficient to fund its capital and other cash requirements for at least the next twelve months from the date that the Company’s consolidated financial statements for the Second Quarter 2024 were issued.

The Company plans to address its ongoing liquidity needs with additional financing as necessary, including but not limited to the rights offering that the Company is currently contemplating, and for which a preliminary prospectus has been filed with the SEC on Form S-1 on October 15, 2024.

For more information about the ABL Credit Facility and the Mithaq Credit Facility, see “Note 7.

12 unchanged sentences

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this update on its consolidated financial statements.

The Company expects the adoption of ASU 2023-07 to expand its disclosures, but does not expect it to have a material impact on its consolidated financial statements.

THE CHILDREN’S PLACE, INC.

9 unchanged sentences

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

Thirteen Weeks Ended Twenty-six Weeks Ended

2024 July 29,

2023 August 3,

2024 July 29,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

(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, $ 3.1 million, and $ 11.7 million within Accrued expenses and other current liabilities as of August 3, 2024, February 3, 2024, and July 29, 2023, respectively, based upon estimated time of delivery, at which point control passes to the customer.

The Company deferred sales of $ 9.3 million, $ 3.1 million, and $ 7.6 million within Accrued expenses and other current liabilities as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively, based upon estimated time of delivery, at which point control passes to the customer.

Sales tax collected from customers is excluded from revenue.

For its wholesale business, the Company recognizes revenue, including shipping and handling fees billed to customers, when title of the goods passes to the customer, net of commissions, discounts, operational chargebacks, and cooperative advertising.

The allowance for wholesale revenue included within Accounts receivable was $ 8.0 million, $ 9.0 million, and $ 7.4 million as of August 3, 2024, February 3, 2024, and July 29, 2023, respectively.

The allowance for wholesale revenue included within Accounts receivable was $ 14.1 million, $ 9.0 million, and $ 8.6 million as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively.

For the sale of goods to retail customers with a right of return, the Company recognizes revenue for the consideration it expects to be entitled to and calculates an allowance for estimated sales returns based upon the Company’s sales return experience.

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 $ 2.1 million, $ 1.7 million, and $ 2.5 million as of August 3, 2024, February 3, 2024, and July 29, 2023, respectively.

The allowance for estimated sales returns, which is recorded in Accrued expenses and other current liabilities, was $ 1.9 million, $ 1.7 million, and $ 2.5 million as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively.

THE CHILDREN’S PLACE, INC.

17 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 $ 3.6 million, $ 1.7 million, and $ 5.6 million as of August 3, 2024, February 3, 2024, and July 29, 2023, respectively.

The total contract liabilities related to this program were $ 3.8 million, $ 1.7 million, and $ 2.0 million as of November 2, 2024, February 3, 2024, and October 28, 2023, 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 August 3, 2024, February 3, 2024, and July 29, 2023 was $ 6.4 million, $ 6.8 million, and $ 10.2 million, respectively.

The gift card liability balance as of November 2, 2024, February 3, 2024, and October 28, 2023 was $ 4.5 million, $ 6.8 million, and $ 6.3 million, respectively.

During Year-To-Date 2024, the Company recognized Net sales of $ 4.7 million related to the gift card liability balance that existed at February 3, 2024.

5 unchanged sentences

The Company records these territorial fees as deferred revenue and amortizes the fee into Net sales over the life of the territorial agreement.

RESTRUCTURING

As a result of the strategic actions associated with the voluntary early termination and subsequent renewal of the Company’s corporate office lease, the move of its distribution center operations from Toronto, Canada (“TODC”) to Alabama in the United States, and workforce reductions, the Company incurred $ 2.5 million in restructuring costs during Year-To-Date 2024, and $ 1.2 million and $ 11.8 million in restructuring costs during the Third Quarter 2023 and Year-To-Date 2023, respectively, on a pretax basis, summarized in the following table:

THE CHILDREN’S PLACE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

RESTRUCTURING

As a result of the strategic actions associated with the voluntary early termination and subsequent renewal of the Company’s corporate office lease, the move of its distribution center operations from Toronto, Canada (“TODC”) to Alabama in the United States, and workforce reductions, the Company incurred $ 0.2 million and $ 2.5 million in restructuring costs during the Second Quarter 2024 and Year-To-Date 2024, respectively, on a pretax basis, summarized in the following table:

Thirteen Weeks Ended Twenty-six Weeks Ended

2024 July 29,

2023 August 3,

2024 July 29,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

(in thousands)

8 unchanged sentences

_______________________________________

(1) Includes non-cash charges related to accelerated depreciation on certain assets in the corporate office over the reduced term, amounting to $ 0.2 million and $ 0.7 million for the Second Quarter 2024 and Year-To-Date 2024, respectively.

(1) Includes non-cash charges related to accelerated depreciation on certain assets in the corporate office over the reduced term, amounting to $ 0.7 million during Year-To-Date 2024.

(2) Includes non-cash charges related to accelerated depreciation on TODC assets, amounting to $ 1.1 million during Year-To-Date 2024.

2 unchanged sentences

The remaining restructuring costs are primarily recorded within The Children’s Place U.S.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the restructuring costs that have been partially settled with cash payments and the remaining related liability as of August 3, 2024.

The remaining related liability is expected to be settled with cash payments during the remainder of Fiscal 2024 and these costs are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets:

The following table summarizes the restructuring costs that have been settled with cash payments.

There is no remaining liability as of November 2, 2024.

Employee-Related Costs TODC Costs Total

6 unchanged sentences

Balance at August 3, 2024 248 319 567

Provision ( 248 ) ( 319 ) ( 567 )

Balance at November 2, 2024 $ — $ — $ —

Employee-Related Costs Lease Termination Costs Professional Fees Total

18 unchanged sentences

The Company recorded an impairment charge on the Gymboree tradename of $ 29.0 million in Fiscal 2023, which reduced the carrying value to its fair value of $ 41.0 million.

The Company performed a quantitative impairment assessment of the Gymboree tradename as of June 30, 2024, and recorded additional asset impairment charges of $ 28.0 million in the Second Quarter 2024, which reduced the carrying value to its fair value of $ 13.0 million as of August 3, 2024.

The Company recorded a further impairment charge on the Gymboree tradename of $ 28.0 million in the Second Quarter 2024, which reduced the carrying value to its fair value of $ 13.0 million.

The Company did not record an impairment charge in the Third Quarter 2024.

The Company’s intangible assets were as follows:

August 3, 2024

November 2, 2024

Useful Life Gross Amount Accumulated Amortization Net Amount

11 unchanged sentences

Total intangible assets $ 45,000 $ ( 3,877 ) $ 41,123

July 29, 2023

October 28, 2023

Useful Life Gross Amount Accumulated Amortization Net Amount

11 unchanged sentences

2024 February 3,

2024 July 29,

2024 October 28,

(in thousands)

10 unchanged sentences

Property and equipment, net $ 105,486 $ 124,750 $ 134,639

At August 3, 2024 and July 29, 2023, 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 did no t record asset impairment charges in the Second Quarter 2024 and Year-To-Date 2024.

The Company recorded asset impairment charges in the Second Quarter 2023 and Year-To-Date 2023 of $ 0.8 million and $ 2.5 million, respectively, inclusive of right of use (“ROU”) assets.

At November 2, 2024 and October 28, 2023, 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 did no t record asset impairment charges in the Third Quarter 2024 and Year-To-Date 2024.

The Company recorded asset impairment charges in the Third Quarter 2023 and Year-To-Date 2023 of $ 0.6 million and $ 3.1 million, respectively, inclusive of right of use (“ROU”) assets.

The Company has operating leases for retail stores, corporate offices, distribution facilities, and certain equipment.

3 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

2024 July 29,

2023 August 3,

2024 July 29,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

(in thousands)

5 unchanged sentences

(1) Includes short term leases with lease periods of less than 12 months.

As of August 3, 2024, the weighted-average remaining operating lease term was 4.3 years, and the weighted-average discount rate for operating leases was 7.8 %.

As of November 2, 2024, the weighted-average remaining operating lease term was 4.4 years, and the weighted-average discount rate for operating leases was 8.0 %.

Cash paid for amounts included in the measurement of operating lease liabilities during Year-To-Date 2024 was $ 59.8 million.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of August 3, 2024, the maturities of operating lease liabilities were as follows:

As of November 2, 2024, the maturities of operating lease liabilities were as follows:

(in thousands)

23 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Second Quarter 2024 and Year-To-Date 2024, the Company recognized $ 6.3 million and $ 12.0 million, respectively, in interest expense related to the ABL Credit Facility.

For the Second Quarter 2023 and Year-To-Date 2023, the Company recognized $ 6.1 million and $ 10.8 million, respectively, in interest expense related to the ABL Credit Facility.

For the Third Quarter 2024 and Year-To-Date 2024, the Company recognized $ 7.1 million and $ 19.1 million, respectively, in interest expense related to the ABL Credit Facility.

For the Third Quarter 2023 and Year-To-Date 2023, the Company recognized $ 7.2 million and $ 18.0 million, respectively, in interest expense related to the ABL Credit Facility.

Prior to April 18, 2024, when the 2021 Term Loan was fully repaid, credit extended under the ABL Credit Facility was secured by a first priority security interest in substantially all of the Company’s U.S.

8 unchanged sentences

The ABL Credit Facility contains customary events of default, which include (subject in certain cases to customary grace and cure periods) nonpayment of principal or interest, breach of covenants, failure to pay certain other indebtedness, and certain events of bankruptcy, insolvency or reorganization, such as a change of control.

In October 2023, the Company became aware of inadvertent calculation errors contained in the June, July and August 2023 borrowing base certificates provided to the Credit Agreement Lenders, all of which have since been remedied.

As the Credit Agreement Lenders determined that the calculation errors resulted in certain technical defaults under the Credit Agreement (including the Company not being in compliance with certain debt covenants), the Company and the Credit Agreement Lenders entered into a Waiver and Amendment Agreement (the “Waiver Agreement”) on October 24, 2023, pursuant to which the Credit Agreement Lenders waived all of the defaults and the Company agreed to certain temporary enhanced reporting requirements and temporary restrictions on certain payments.

These enhanced reporting requirements and restrictions will cease once the Company achieves certain excess availability thresholds.

At no time prior to or following entering into the Waiver Agreement was the Company prevented from borrowing under the Credit Agreement in the ordinary course in accordance with its terms.

During the First Quarter 2024, Mithaq became the controlling shareholder of the Company and this change of control triggered an event of default under the Credit Agreement, thus subjecting the Company to cash dominion by the Credit Agreement Lenders.

Subsequently, the Credit Agreement Lenders agreed to forbear from enforcing certain other rights and remedies during a limited forbearance period.

On April 16, 2024, the Company and certain of its subsidiaries entered into the Seventh Amendment with the Credit Agreement Lenders that, among other things, provided a permanent waiver of the change of control event of default.

As of April 18, 2024, the ABL Credit Facility was reduced from $ 445.0 million to $ 433.0 million, and until the Company achieved certain excess availability thresholds, the Seventh Amendment preserved the temporary enhanced reporting requirements under the Waiver Agreement and continued to impose cash dominion.

As of August 29, 2024, the Company is no longer under cash dominion and it has reverted to the standard reporting requirements under the Credit Agreement.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below presents the components of the Company’s ABL Credit Facility:

The tables below present the components of the Company’s ABL Credit Facility:

2024 February 3,

2024 July 29,

2024 October 28,

(in millions)

11 unchanged sentences

Interest rate at end of period 8.1 % 8.1 % 8.0 %

____________________________________________

(1) In Fiscal 2023, the total borrowing base availability and credit facility availability were both calculated net of the excess availability threshold, as prior to the Seventh Amendment, crossing that threshold would have resulted in cash dominion, which would have triggered a fixed charge coverage ratio covenant test and would likely have led to a default under the Credit Agreement.

As of the Seventh Amendment, the fixed charge coverage ratio covenant has been removed from the Credit Agreement, and entering into cash dominion by crossing the excess availability threshold no longer poses the same risk of default under the Credit Agreement.

(2) The lower of the credit facility availability and the total borrowing base availability.

(3) The sub-limit availability for letters of credit was $ 12.8 million at November 2, 2024, and $ 42.6 million at February 3, 2024 and October 28, 2023.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year-To-Date 2024 Fiscal 2023 Year-To-Date 2023

3 unchanged sentences

Average interest rate 9.0 % 7.5 % 7.0 %

____________________________________________

(1) In the Second Quarter 2024, given that the Company was under cash dominion, the excess availability threshold was not applicable to the total borrowing base availability.

As of August 29, 2024, the Company is no longer under cash dominion.

In Fiscal 2023, the total borrowing base availability was calculated net of the excess availability threshold, as prior to the Seventh Amendment, crossing that threshold would have resulted in cash dominion, which would have triggered a fixed charge coverage ratio covenant test and would likely have led to a default under the Credit Agreement.

As of the Seventh Amendment, the fixed charge coverage ratio covenant has been removed from the Credit Agreement.

(2) In the Second Quarter 2024, given that the Company was under cash dominion, the excess availability threshold was not applicable to the determination of the credit facility availability.

As of August 29, 2024, the Company is no longer under cash dominion.

In Fiscal 2023, the credit facility availability was calculated net of the excess availability threshold, as prior to the Seventh Amendment, crossing that threshold would have resulted in cash dominion, which would have triggered a fixed charge coverage ratio covenant test and would likely have led to a default under the Credit Agreement.

As of the Seventh Amendment, the fixed charge coverage ratio covenant has been removed from the Credit Agreement.

(3) The lower of the credit facility availability and the total borrowing base availability.

(4) The sub-limit availability for letters of credit was $ 12.8 million at August 3, 2024, and $ 42.6 million at February 3, 2024 and July 29, 2023.

The 2021 Term Loan bore interest, payable monthly, at (a) the SOFR per annum plus 2.750 % for any portion that was a SOFR loan, or (b) the base rate per annum plus 2.000 % for any portion that was a base rate loan.

1 unchanged sentence

The Company recognized $ 1.1 million in interest expense related to the 2021 Term Loan during Year-To-Date 2024.

For the Second Quarter 2023 and Year-To-Date 2023, the Company recognized $ 1.0 million and $ 1.9 million, respectively, in interest expense related to the 2021 Term Loan.

For the Third Quarter 2023 and Year-To-Date 2023, the Company recognized $ 0.4 million and $ 2.4 million, respectively, in interest expense related to the 2021 Term Loan.

As of April 18, 2024, the 2021 Term Loan was fully repaid.

As of August 3, 2024, unamortized deferred financing costs amounted to $ 2.4 million related to the Company’s ABL Credit Facility.

As of November 2, 2024, unamortized deferred financing costs amounted to $ 4.3 million related to the Company’s ABL Credit Facility.

Mithaq Term Loans

1 unchanged sentence

The Company received the First Tranche on February 29, 2024 and the Second Tranche on March 8, 2024.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Initial Mithaq Term Loan matures on February 15, 2027.

4 unchanged sentences

The New Mithaq Term Loan is guaranteed by each of the Company’s subsidiaries that guarantee the Company’s ABL Credit Facility.

For the Second Quarter 2024 and Year-To-Date 2024, the Company recognized $ 2.1 million and $ 2.5 million, respectively, in deferred interest-equivalent expense related to the New Mithaq Term Loan.

For the Third Quarter 2024 and Year-To-Date 2024, the Company recognized $ 2.1 million and $ 4.6 million, respectively, in deferred interest-equivalent expense related to the New Mithaq Term Loan.

The Mithaq Term Loans are subject to an amended and restated subordination agreement (as amended from time to time, the “Subordination Agreement”), dated as of April 16, 2024, by and among the Company and certain of its subsidiaries, Wells Fargo and Mithaq, pursuant to which the Mithaq Term Loans are subordinated in payment priority to the obligations of the Company and its subsidiaries under the Credit Agreement.

3 unchanged sentences

The Mithaq Term Loans contain certain customary events of default, which include (subject in certain cases to customary grace periods), nonpayment of principal, breach of other covenants of the Mithaq Term Loans, inaccuracy in representations or warranties, acceleration of certain other indebtedness (including under the Credit Agreement), certain events of bankruptcy, insolvency or reorganization, such as a change of control, and invalidity of any part of the Mithaq Term Loans.

As of August 3, 2024 unamortized deferred financing costs amounted to $ 3.2 million related to the Mithaq Term Loans.

Maturities of the Company’s principal debt payments as of August 3, 2024 are as follows:

August 3, 2024

As of November 2, 2024 unamortized deferred financing costs amounted to $ 2.9 million related to the Mithaq Term Loans.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Maturities of the Company’s principal debt payments on the Mithaq Term Loans as of November 2, 2024 are as follows:

November 2, 2024

(in thousands)

10 unchanged sentences

Additionally, such debt shall require no mandatory prepayments and shall mature no earlier than July 1, 2026.

As of August 3, 2024, no debt had been incurred under the Mithaq Credit Facility.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of November 2, 2024, no debt had been incurred under the Mithaq Credit Facility.

COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

The plaintiffs’ second amended complaint sought to represent a class of California purchasers and sought, among other items, injunctive relief, damages, and attorneys’ fees and costs.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company engaged in mediation proceedings with the plaintiffs in December 2016 and April 2017.

29 unchanged sentences

On June 10, 2024, JAMS advised that it would be pausing its administration of the claims until the parties resolve their dispute over which set of arbitration terms apply to the case.

As of February 2024, the Company is also a defendant in Randeep Singh Khalsa v.

The Company’s motion to dismiss was denied in November 2024.

As of February 2024, the Company was also a defendant in Randeep Singh Khalsa v.

The Children’s Place, Inc.

, a purported class action, pending in the United States District Court of New Jersey.

The complaint purports to assert claims under the federal securities laws, alleging that between March 16, 2023, and February 8, 2024, the Company made materially false and/or misleading statements, and failed to disclose material adverse facts to its investors, which the complaint alleges led to a drop in the price of the Company’s common stock.

The Company intends to defend this case vigorously and it is currently too early to assess the possible outcome of this case.

The complaint purported to assert claims under the federal securities laws, alleging that between March 16, 2023, and February 8, 2024, the Company made materially false and/or misleading statements, and failed to disclose material adverse facts to its investors, which the complaint alleged led to a drop in the price of the Company’s common stock.

As of November 20, 2024, this case has been dismissed in its entirety, with prejudice.

The Company is also involved in various legal proceedings arising in the normal course of business.

In the opinion of management, any ultimate liability arising out of these proceedings is not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

THE CHILDREN’S PLACE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company is also involved in various legal proceedings arising in the normal course of business.

STOCKHOLDERS’ (DEFICIT) EQUITY

5 unchanged sentences

Currently, given the terms of the Company’s Credit Agreement as amended by its Seventh Amendment described above, the Company is not expecting to repurchase any shares in Fiscal 2024, except as described below, pursuant to our practice as a result of our insider trading policy.

As of August 3, 2024, there was $ 156.7 million remaining availability under the Share Repurchase Program.

As of November 2, 2024, there was $ 156.7 million remaining availability under the Share Repurchase Program.

Pursuant to the Company’s practice, including due to restrictions imposed by the Company’s insider trading policy during black-out periods, the Company withholds and repurchases shares of vesting stock awards and makes payments to taxing authorities as required by law to satisfy the withholding tax requirements of all equity award recipients.

2 unchanged sentences

The following table summarizes the Company’s share repurchases:

Twenty-six Weeks Ended

August 3, 2024 July 29, 2023

Thirty-nine Weeks Ended

November 2, 2024 October 28, 2023

Shares Amount Shares Amount

15 unchanged sentences

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

Thirteen Weeks Ended Twenty-six Weeks Ended

2024 July 29,

2023 August 3,

2024 July 29,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

(in thousands)

5 unchanged sentences

___________________________________________

(1) Stock-based compensation expense (benefit) recorded within Cost of sales amounted to $ 0.1 million and $( 0.5 ) million in the Second Quarter 2024 and Second Quarter 2023, respectively, and $ 1.1 million and $( 0.1 ) million in Year-To-Date 2024 and Year-To-Date 2023, respectively.

(1) Stock-based compensation expense (benefit) recorded within Cost of sales amounted to a benefit of $( 0.3 ) million and an expense of $ 0.1 million in the Third Quarter 2024 and Third Quarter 2023, respectively, and an expense of $ 0.9 million in Year-To-Date 2024.

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

3 unchanged sentences

The incremental expense recorded for Performance Awards during Year-To-Date 2024 due to the change of control was $ 9.9 million.

LOSS PER COMMON SHARE

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

Thirteen Weeks Ended Twenty-six Weeks Ended

2024 July 29,

2023 August 3,

2024 July 29,

EARNINGS (LOSS) PER COMMON SHARE

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

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

(in thousands)

Net loss $ ( 32,114 ) $ ( 35,355 ) $ ( 69,909 ) $ ( 64,188 )

Net income (loss) $ 20,080 $ 38,482 $ ( 49,829 ) $ ( 25,705 )

Basic weighted average common shares outstanding 12,779 12,548 12,731 12,481

1 unchanged sentence

Diluted weighted average common shares outstanding 12,800 12,619 12,731 12,481

Anti-dilutive shares excluded from diluted loss per common share calculation 34 74 56 151

Anti-dilutive shares excluded from diluted earnings (loss) per common share calculation — — 44 124

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FAIR VALUE MEASUREMENT

3 unchanged sentences

The Company stock included in the deferred compensation plan is not subject to fair value measurement.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair value of the Company’s Initial Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $ 78.6 million at August 3, 2024, was approximately $ 55.1 million.

The fair value of the Company’s New Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $ 90.0 million at August 3, 2024, was approximately $ 78.8 million.

The fair value of the Company’s Initial Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $ 78.6 million at November 2, 2024, was approximately $ 57.6 million.

The fair value of the Company’s New Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $ 90.0 million at November 2, 2024, was approximately $ 79.8 million.

The fair value of debt was estimated using a market approach, which considers the Company’s credit risk and market related conditions, and is therefore within Level 2 of the fair value hierarchy.

6 unchanged sentences

These assets are tested for impairment when events indicate that their carrying value may not be recoverable.

The Company performed periodic quantitative impairment assessments of its long-lived assets and did no t record an impairment charge in the Second Quarter 2024 and Year-To-Date 2024.

The Company recorded asset impairment charges in the Second Quarter 2023 and Year-To-Date 2023 of $ 0.8 million and $ 2.5 million, respectively, inclusive of ROU assets.

The Company performed periodic quantitative impairment assessments of its long-lived assets and did no t record an impairment charge in the Third Quarter 2024 and Year-To-Date 2024.

The Company recorded asset impairment charges in the Third Quarter 2023 and Year-To-Date 2023 of $ 0.6 million and $ 3.1 million, respectively, inclusive of ROU assets.

Impairment of Indefinite-Lived Intangible Assets

1 unchanged sentence

Estimating fair value using this method requires management to estimate future revenues, royalty rates, discount rates, long-term growth rates, and other factors in order to project future cash flows.

The Company performed a quantitative impairment assessment of the Gymboree tradename as of June 30, 2024, in accordance with FASB ASC 350— Intangibles – Goodwill and Other .

Based on this assessment, the Company recorded an impairment charge of $ 28.0 million in the Second Quarter 2024, primarily due to reductions in Gymboree sales forecasts and a reduction in the royalty rate u sed to value the tradename, which reduced the carrying value to its fair value of $ 13.0 million as of August 3, 2024.

The Company performs an annual impairment assessment of the Gymboree tradename at the end of December or whenever circumstances indicate that a decline in value may have occurred, in accordance with FASB ASC 350— Intangibles – Goodwill and Other .

Based on this assessment, the Company recorded an impairment charge of $ 29.0 million in Fiscal 2023, and a further impairment charge of $ 28.0 million in the Second Quarter 2024, which reduced the carrying value to its fair value of $ 13.0 million.

There were no impairment charges recorded in the Third Quarter 2024.

Unfavorable changes in certain of the Company’s key assumptions may affect future testing results.

For example, keeping all other assumptions constant, a 100-basis point increase in the discount rate or a 10% decrease in forecasted revenue would result in further impairment charges of approximately $ 1.0 million.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company computes income taxes using the asset and liability method.

1 unchanged sentence

The Company’s deferred tax assets and liabilities are comprised largely of differences relating to depreciation and amortization, rent expense, inventory, stock-based compensation, net operating loss carryforwards, tax credits, and various accruals and reserves.

The Company’s effective income tax rate for the Second Quarter 2024 was a provision of ( 3.6 )%, or $ 1.1 million, compared to a benefit of 20.7 %, or $( 9.2 ) million, during the Second Quarter 2023.

The change in the effective income tax rate and income tax provision (benefit) for the Second Quarter 2024 compared to the Second Quarter 2023 was primarily driven by the establishment of a valuation allowance against the Company’s net deferred tax assets in Fiscal 2023.

The Company’s provision (benefit) for income taxes in the Third Quarter 2024 has been calculated by applying an estimate of the annual effective tax rate for Fiscal 2024 to pre-tax income (loss), excluding unusual or infrequently occurring discrete items in the reporting period.

This is the method that has historically been followed in interim reporting periods with the exception of the Third Quarter 2023, where the Company computed its provision (benefit) for income taxes based on the actual effective tax rate for Year-To-Date 2023 by applying the discrete method as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18, “Income Taxes-Interim Reporting-Initial Measurement”.

The Company’s effective income tax rate for the Third Quarter 2024 was a benefit of ( 4.7 )%, or $( 0.9 ) million, compared to ( 3.9 )%, or $( 1.5 ) million, during the Third Quarter 2023.

The change in the effective income tax rate and income tax provision (benefit) for the Third Quarter 2024 compared to the Third Quarter 2023 was primarily driven by the establishment of a valuation allowance against the Company’s net deferred tax assets in Fiscal 2023, partially offset by a favorable shift in the jurisdictional earnings mix in Fiscal 2024.

Furthermore, the Company’s provision (benefit) for income taxes in the Third Quarter 2024 has been calculated by applying an estimate of the annual effective tax rate.

In the Third Quarter 2023, the Company computed its provision (benefit) for income taxes based on the actual effective tax rate for Year-To-Date 2023 by applying the discrete method.

The Company’s effective income tax rate for Year-To-Date 2024 was a provision of ( 4.8 )%, or $ 2.3 million, compared to a benefit of 40.9 %, or $( 17.8 ) million, for Year-To-Date 2023.

The change in the effective income tax rate and income tax provision (benefit) for Year-To-Date 2024 compared to Year-To-Date 2023 was primarily driven by the establishment of a valuation allowance against the Company’s net deferred tax assets in Fiscal 2023.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic.

1 unchanged sentence

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

As of August 3, 2024, the remaining income tax receivable of $ 19.1 million is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

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 $ 7.8 million, $ 7.0 million, and $ 4.3 million as of August 3, 2024, February 3, 2024, and July 29, 2023, respectively, and is included within long-term liabilities.

Additional interest expense recognized in the Second Quarter 2024 and Second Quarter 2023 related to unrecognized tax benefits was not significant.

As of November 2, 2024, the remaining income tax receivable of $ 19.1 million is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

The Company accrues interest and penalties related to unrecognized tax benefits as part of its provision (benefit) for income taxes.

The total amount of unrecognized tax benefits was $ 6.9 million, $ 7.0 million, and $ 4.8 million as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively, and is included within long-term liabilities.

Additional interest expense recognized in the Third Quarter 2024 and Third Quarter 2023 related to unrecognized tax benefits was not significant.

The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong.

15 unchanged sentences

This could cause state income taxes to be paid earlier than otherwise would be paid if such limitation was not in effect and could cause such NOLs to expire unused.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEGMENT INFORMATION

14 unchanged sentences

Net sales to external customers are derived from merchandise sales, and the Company has one U.S.

wholesale customer that individually accounted for more than 10% of its net sales, amounting to $ 44.5 million and $ 61.0 million for the Second Quarter 2024 and Year-To-Date 2024, respectively, and accounts for a majority of the Company’s accounts receivable.

As of August 3, 2024, The Children’s Place U.S.

wholesale customer that individually accounted for more than 10% of its net sales, amounting to $ 57.3 million and $ 118.3 million for the Third Quarter 2024 and Year-To-Date 2024, respectively, and accounts for a majority of the Company’s accounts receivable, amounting to $ 45.1 million as of November 2, 2024.

As of November 2, 2024, The Children’s Place U.S.

had 449 stores and The Children’s Place International had 61 stores.

As of July 29, 2023, The Children’s Place U.S.

As of October 28, 2023, The Children’s Place U.S.

had 520 stores and The Children’s Place International had 71 stores.

THE CHILDREN’S PLACE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table provides segment level financial information:

Thirteen Weeks Ended Twenty-six Weeks Ended

2024 July 29,

2023 August 3,

2024 July 29,

Thirteen Weeks Ended Thirty-nine Weeks Ended

2024 October 28,

2023 November 2,

2024 October 28,

(in thousands)

4 unchanged sentences

Total net sales $ 390,173 $ 480,234 $ 977,706 $ 1,147,474

Operating loss:

Operating income (loss):

The Children’s Place U.S.

1 unchanged sentence

The Children’s Place International (1)

Total operating loss $ ( 21,776 ) $ ( 36,941 ) $ ( 49,764 ) $ ( 67,008 )

Operating loss as a percentage of net sales:

1,138 6,416 ( 4,975 ) 4,174

Total operating income (loss) $ 29,258 $ 44,967 $ ( 20,506 ) $ ( 22,042 )

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

The Children’s Place U.S.

1 unchanged sentence

The Children’s Place International (1)

Total operating loss as a percentage of net sales ( 6.8 %) ( 10.7 %) ( 8.5 %) ( 10.0 )%

3.3 % 16.7 % ( 6.0 %) 4.2 %

Total operating income (loss) as a percentage of net sales 7.5 % 9.4 % ( 2.1 %) ( 1.9 )%

Depreciation and amortization:

9 unchanged sentences

____________________________________________

(1) Net sales from The Children’s Place International are primarily derived from Canadian operations.

(1) The Company’s foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S.

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