Childrens Place, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS. THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) May 2, 2026 January 31, 2026 May 3, 2025 (in thousands, except par value) ASSETS Current assets: Cash and cash equivalents $ 4,781 $ 5,489 $ 5,694 Accounts receivable 30,403 25,967 41,337 Inventories 326,378 325,100 422,204 Prepaid expenses and other current assets 41,670 41,441 31,374 Total current assets 403,232 397,997 500,609 Long-term assets: Property and equipment, net 81,465 81,658 92,094 Right-of-use assets 218,835 164,495 166,008 Tradenames, net 13,000 13,000 13,000 Other assets 12,644 13,149 7,891 Total assets $ 729,176 $ 670,299 $ 779,602 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Revolving loan $ 149,958 $ 131,078 $ 258,623 Accounts payable 102,035 108,481 131,392 Current portion of operating lease liabilities 66,234 57,236 66,522 Income taxes payable 1,770 2,945 1,134 Short-term debt 44,382 — — Accrued expenses and other current liabilities 88,004 88,149 85,938 Total current liabilities 452,383 387,889 543,609 Long-term liabilities: Long-term debt 97,678 97,588 — Related party long-term debt 107,724 107,554 107,010 Long-term portion of operating lease liabilities 167,875 120,410 112,667 Other tax liabilities 3,594 3,520 5,405 Other long-term liabilities 7,155 7,521 9,496 Total liabilities 836,409 724,482 778,187 Commitments and contingencies (see Note 7) Stockholders’ equity (deficit): Preferred stock, $ 1.00 par value, 1,000 shares authorized, 0 shares issued and outstanding — — — Common stock, $ 0.10 par value, 100,000 shares authorized; 22,234 , 22,171 , and 22,065 issued; 22,232 , 22,169 , and 22,062 outstanding 2,223 2,217 2,207 Additional paid-in capital 242,258 242,718 241,824 Treasury stock, at cost ( 2 , 2 , and 3 shares) ( 68 ) ( 68 ) ( 90 ) Deferred compensation 68 68 90 Accumulated other comprehensive loss ( 17,576 ) ( 18,171 ) ( 15,909 ) Accumulated deficit ( 334,138 ) ( 280,947 ) ( 226,707 ) Total stockholders’ equity (deficit) ( 107,233 ) ( 54,183 ) 1,415 Total liabilities and stockholders’ equity (deficit) $ 729,176 $ 670,299 $ 779,602 See accompanying notes to these consolidated financial statements. 1 Table of Contents THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands, except loss per common share) Net sales $ 215,225 $ 242,125 Cost of sales (exclusive of depreciation and amortization) 161,874 171,342 Gross profit 53,351 70,783 Selling, general, and administrative expenses 88,864 86,670 Depreciation and amortization 6,666 8,230 Operating loss ( 42,179 ) ( 24,117 ) Related party interest expense ( 1,942 ) ( 1,871 ) Other interest expense ( 7,756 ) ( 6,701 ) Interest income 8 10 Loss before provision for income taxes ( 51,869 ) ( 32,679 ) Provision for income taxes 1,322 1,344 Net loss $ ( 53,191 ) $ ( 34,023 ) Loss per common share Basic $ ( 2.40 ) $ ( 1.57 ) Diluted $ ( 2.40 ) $ ( 1.57 ) Weighted average common shares outstanding Basic 22,209 21,629 Diluted 22,209 21,629 See accompanying notes to these consolidated financial statements. 2 Table of Contents THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands) Net loss $ ( 53,191 ) $ ( 34,023 ) Other comprehensive income: Foreign currency translation adjustment 595 3,582 Total comprehensive loss $ ( 52,596 ) $ ( 30,441 ) See accompanying notes to these consolidated financial statements. 3 Table of Contents THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited) Thirteen Weeks Ended May 2, 2026 Accumulated Additional Other Total Common Stock Paid-In Deferred Accumulated Comprehensive Treasury Stock Stockholders’ (in thousands) Shares Amount Capital Compensation Deficit Loss Shares Amount Deficit Balance, January 31, 2026 22,171 $ 2,217 $ 242,718 $ 68 $ ( 280,947 ) $ ( 18,171 ) ( 2 ) $ ( 68 ) $ ( 54,183 ) Vesting of stock awards 72 7 ( 7 ) — — — — — — Stock-based compensation benefit — — ( 425 ) — — — — — ( 425 ) Purchase and retirement of common stock ( 9 ) ( 1 ) ( 28 ) — — — — — ( 29 ) Other comprehensive income — — — — — 595 — — 595 Net loss — — — — ( 53,191 ) — — — ( 53,191 ) Balance, May 2, 2026 22,234 $ 2,223 $ 242,258 $ 68 $ ( 334,138 ) $ ( 17,576 ) ( 2 ) $ ( 68 ) $ ( 107,233 ) Thirteen Weeks Ended May 3, 2025 Accumulated Total Additional Other Stockholders’ Common stock Paid-In Deferred Accumulated Comprehensive Treasury Stock Equity (in thousands) Shares Amount Capital Compensation Deficit Loss Shares Amount (Deficit) Balance, February 1, 2025 12,785 $ 1,279 $ 151,485 $ 90 $ ( 192,684 ) $ ( 19,491 ) ( 3 ) $ ( 90 ) $ ( 59,411 ) Vesting of stock awards 64 6 ( 6 ) — — — — — — Stock-based compensation expense — — 1,746 — — — — — 1,746 Purchase and retirement of common stock ( 15 ) ( 1 ) ( 83 ) — — — — — ( 84 ) Rights offering stock issuance 9,231 923 89,077 — — — — — 90,000 Stock issuance costs — — ( 395 ) — — — — — ( 395 ) Other comprehensive income — — — — — 3,582 — — 3,582 Net loss — — — — ( 34,023 ) — — — ( 34,023 ) Balance, May 3, 2025 22,065 $ 2,207 $ 241,824 $ 90 $ ( 226,707 ) $ ( 15,909 ) ( 3 ) $ ( 90 ) $ 1,415 See accompanying notes to these consolidated financial statements. 4 Table of Contents THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 53,191 ) $ ( 34,023 ) Reconciliation of net loss to net cash used in operating activities: Non-cash portion of operating lease expense 15,575 17,563 Depreciation and amortization 6,666 8,230 Amortization of financing costs 3,339 716 Non-cash stock-based compensation expense (benefit), net ( 425 ) 1,746 Loss on extinguishment of debt — 1,039 Other non-cash (income) expense, net — ( 78 ) Changes in operating assets and liabilities: Inventories ( 1,282 ) ( 21,565 ) Accounts receivable ( 4,434 ) 1,407 Prepaid expenses ( 1,393 ) ( 8,945 ) Income taxes payable, net of prepayments 2,787 690 Other non-current assets 222 ( 954 ) Accounts payable and other current liabilities ( 7,810 ) 9,424 Lease liabilities ( 13,454 ) ( 17,425 ) Other long-term liabilities ( 366 ) ( 783 ) Net cash used in operating activities ( 53,766 ) ( 42,958 ) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 8,034 ) ( 3,413 ) Net cash used in investing activities ( 8,034 ) ( 3,413 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit facility 168,169 168,814 Repayments under revolving credit facility ( 149,289 ) ( 155,850 ) Proceeds from rights offering — 90,000 Purchase and retirement of common stock ( 29 ) ( 84 ) Repayment of related party term loan — ( 60,187 ) Payment of debt issuance costs ( 713 ) — Proceeds from short-term debt 42,301 — Payment of stock issuance costs — ( 395 ) Net cash provided by financing activities 60,439 42,298 Effect of exchange rate changes on cash and cash equivalents 653 4,420 Net increase (decrease) in cash and cash equivalents ( 708 ) 347 Cash and cash equivalents, beginning of period 5,489 5,347 Cash and cash equivalents, end of period $ 4,781 $ 5,694 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Net cash paid (received) for income taxes $ ( 1,422 ) $ 667 Cash paid for interest 5,416 5,142 Purchases of property and equipment not yet paid 3,835 2,492 See accompanying notes to these consolidated financial statements. 5 Table of Contents THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION Description of Business The Children’s Place, Inc. and its subsidiaries (collectively, the “Company”) is one of the only pure-play children’s specialty retailers in North America with an omni-channel presence. 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 “The Children’s Place” and “Gymboree”. Its global retail and wholesale network includes two digital storefronts, 497 stores in North America, wholesale marketplaces, 329 international points of distribution in 13 countries through nine international franchise and wholesale partners and social media channels on Instagram, Facebook, and X, formerly known as Twitter. The Company’s digital storefronts are at www.childrensplace.com and www.gymboree.com , where its customers are able to shop online for the same merchandise available in its physical stores, as well as certain exclusive merchandise offered only on its e-commerce sites. The Company classifies its business into two segments: The Children’s Place U.S. and The Children’s Place International. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and net sales from its U.S.-based wholesale business. Included in The Children’s Place International segment are its Canadian-based stores and net sales from international franchisees. Each segment includes an e-commerce business located at www.childrensplace.com and www.gymboree.com . Terms that are commonly used in the notes to the Company’s consolidated financial statements are defined as follows: • First Quarter 2026 — The thirteen weeks ended May 2, 2026 • First Quarter 2025 — The thirteen weeks ended May 3, 2025 • Fiscal 2026 — The fifty-two weeks ending January 30, 2027 • Fiscal 2025 — The fifty-two weeks ended January 31, 2026 • Fiscal 2024 — The fifty-two weeks ended February 1, 2025 • SEC — U.S. Securities and Exchange Commission • U.S. GAAP — Generally Accepted Accounting Principles in the United States • FASB — Financial Accounting Standards Board • FASB ASC — FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants Basis of Presentation The unaudited consolidated financial statements and accompanying notes to the consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. As of May 2, 2026, January 31, 2026 and May 3, 2025, 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 normal recurring adjustments necessary for a fair statement of the consolidated balance sheets of the Company as of May 2, 2026 and May 3, 2025, the results of its consolidated operations, consolidated comprehensive loss, and consolidated changes in stockholders’ equity (deficit) for the thirteen weeks ended May 2, 2026 and May 3, 2025, and consolidated cash flows for the thirteen weeks ended May 2, 2026 and May 3, 2025. The consolidated balance sheet as of January 31, 2026 was derived from audited financial statements. Due to the seasonal nature of the Company’s business, the results of operations for the thirteen weeks ended May 2, 2026 and May 3, 2025 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 31, 2026. 6 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Fiscal Year The Company’s fiscal year is a fifty-two week or fifty-three week period ending on the Saturday on or nearest to January 31. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses reported during the period. Actual results could differ from the assumptions used and estimates made by management, which could have a material impact on the Company’s financial position or results of operations. Critical accounting estimates inherent in the preparation of the consolidated financial statements include impairment of long-lived assets, impairment of indefinite-lived intangible assets, income taxes, stock-based compensation, and inventory valuation. Significant Accounting Policy Updates IEEPA Tariff Refund Claims During the First Quarter 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were unlawful and thus deemed invalid. During Fiscal 2025 and Fiscal 2026, the Company paid approximately $ 40 million in IEEPA tariffs, which the Company will seek to recover from the U.S. Customs and Border Protection. The Company has elected to apply the loss recovery guidance under FASB ASC 450 — Contingencies to account for the recognition of these claims. Any future recovery of tariff refund claims will be recognized as a receivable when the claim becomes probable and will be reflected as a reduction of Cost of goods sold for inventory previously sold, or as a reduction of inventory for goods that remain unsold. As of the end of the First Quarter 2026, no asset has been recognized for the recovery of tariff refund claims. Recent Accounting Standards Updates Accounting Pronouncement Recently Adopted In December 2023, the FASB issued Accounting Standards Update No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU 2023-09”). The amendments in ASU 2023-09 were designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. The Company adopted ASU 2023-09 on a prospective basis and is effective for the Fiscal 2025 consolidated financial statements, and subsequent interim periods. The adoption of ASU 2023-09 expanded the Company’s disclosures, but did not have a material impact on its consolidated financial statements. Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued Accounting Standards Update No. 2024-03 “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40),” (“ASU 2024-03”). The amendments in ASU 2024-03 are designed to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements. In September 2025, the FASB issued Accounting Standards Update No. 2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40),” (“ASU 2025-06”). The amendments in ASU 2025-06 remove all references to prescriptive and sequential software development stages, and require entities to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, and may be adopted on a prospective, modified, or retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements. 7 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) 2. REVENUES The following table presents the Company’s net sales disaggregated by geography: Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands) South $ 77,222 $ 85,657 Northeast 46,714 45,854 West 26,895 27,741 Midwest 23,476 25,920 International and other (1) 40,918 56,953 Total net sales $ 215,225 $ 242,125 ____________________________________________ (1) Includes retail and e-commerce sales in Canada and Puerto Rico, wholesale and franchisee sales, and certain amounts earned under the Company’s private label credit card program. Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company recognizes revenue, including shipping and handling fees billed to customers, as applicable, 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 $ 4.3 million, $ 6.3 million, and $ 7.6 million within Accrued expenses and other current liabilities as of May 2, 2026, January 31, 2026, and May 3, 2025, 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, 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 $ 8.6 million, $ 12.3 million, and $ 8.0 million as of May 2, 2026, January 31, 2026, and May 3, 2025, 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 $ 1.1 million, $ 0.7 million, and $ 1.2 million as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively. The Company’s private label credit card is issued to customers for use exclusively at The Children’s Place and Gymboree stores in the United States and online at www.childrensplace.com and www.gymboree.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. Included in the agreement with the third-party financial institution was an upfront bonus paid to the Company and an additional bonus to extend the term of the agreement. These bonuses are recognized as revenue and allocated between brand and reward obligations. As the license of the Company’s brand is the predominant item in the performance obligation, the amount allocated to the brand obligation is recognized on a straight-line basis over the term of the agreement. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur. 8 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) In measuring revenue and determining the consideration the Company is entitled to as part of a contract with a customer, the Company takes into account the related elements of variable consideration, such as additional bonuses, including profit-sharing, over the life of the private label credit card program. Similar to the upfront bonus, the usage-based royalties and bonuses are recognized as revenue and allocated between the brand and reward obligations. The amount allocated to the brand obligation is recognized on a straight-line basis over the remaining term. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur. In addition, the annual profit-sharing amount is recognized quarterly within an annual period when it can be estimated reliably. The additional bonuses are amortized over the contract term based on anticipated progress against future targets and level of risk associated with achieving the targets. The Company has a points-based customer loyalty program in which customers earn points based on purchases and other promotional activities. These points can be redeemed for coupons to discount future purchases. During Fiscal 2025, the Company launched a new loyalty program in which customers can now redeem their coupons over a 12-month period. A contract liability is estimated based on the standalone selling price of benefits earned by customers through the program and the related redemption experience under the program. 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 $ 13.1 million, $ 11.7 million, and $ 5.4 million as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively. During the First Quarter 2026 and First Quarter 2025, the Company recognized Net sales of $ 4.5 million and $ 3.7 million related to the points-based customer loyalty program balance that existed at January 31, 2026 and February 1, 2025, respectively. The Company’s policy with respect to gift cards is to record revenue as and when the gift cards are redeemed for merchandise. The Company recognizes gift card breakage income in proportion to the pattern of rights exercised by the customer when the Company expects to be entitled to breakage and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recorded within Net sales. Prior to their redemption, gift cards are recorded as a liability within Accrued expenses and other current liabilities. The liability is estimated based on expected breakage that considers historical patterns of redemption. The gift card liability balance as of May 2, 2026, January 31, 2026, and May 3, 2025 was $ 2.9 million, $ 3.2 million, and $ 4.4 million, respectively. During the First Quarter 2026 and the First Quarter 2025, the Company recognized Net sales of $ 1.1 million and $ 1.4 million related to the gift card liability balance that existed at January 31, 2026 and February 1, 2025, respectively. The Company has an international program of territorial agreements with franchisees. The Company generates revenues from the franchisees from the sale of product and, in certain cases, sales royalties. The Company recognizes revenue on the sale of product to franchisees when the franchisee takes ownership of the product. The Company records net sales for royalties when the applicable franchisee sells the product to its customers. Under certain agreements, the Company receives a fee from each franchisee for exclusive territorial rights and based on the opening of new stores. The Company records these territorial fees as deferred revenue and amortizes the fee into Net sales over the life of the territorial agreement. 3. INTANGIBLE ASSETS On April 4, 2019, the Company acquired certain intellectual property and related assets of Gymboree Group, Inc. and related entities, which included the worldwide rights to the Gymboree tradename. The Gymboree tradename is recorded in the long-term assets section of the consolidated balance sheets. The Company’s intangible assets were as follows: May 2, 2026 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename Indefinite $ 13,000 $ — $ 13,000 Total intangible assets $ 13,000 $ — $ 13,000 9 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) January 31, 2026 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename Indefinite $ 13,000 $ — $ 13,000 Total intangible assets $ 13,000 $ — $ 13,000 May 3, 2025 Useful Life Gross Amount Accumulated Amortization Net Amount (in thousands) Gymboree tradename Indefinite $ 13,000 $ — $ 13,000 Total intangible assets $ 13,000 $ — $ 13,000 The Company did not identify any indicators of impairment on the Gymboree tradename in the First Quarter 2026 and First Quarter 2025. 4. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: May 2, 2026 January 31, 2026 May 3, 2025 (in thousands) Land and land improvements $ 3,403 $ 3,403 $ 3,404 Building and improvements 36,208 36,208 36,635 Material handling equipment 73,813 73,813 84,659 Leasehold improvements 152,567 152,116 160,393 Store fixtures and equipment 139,648 140,126 151,884 Capitalized software 204,801 208,671 228,679 Construction in progress 7,017 2,091 3,366 617,457 616,428 669,020 Less: accumulated depreciation and amortization ( 535,992 ) ( 534,770 ) ( 576,926 ) Property and equipment, net $ 81,465 $ 81,658 $ 92,094 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 not record asset impairment charges in the First Quarter 2026 and First Quarter 2025. 5. LEASES The Company has operating leases for retail stores, corporate offices, distribution facilities, and certain equipment. The Company’s leases have remaining lease terms ranging from less than one year up to eleven years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the lease early. The Company records all occupancy costs in Cost of sales, except costs for administrative office buildings, which are recorded in Selling, general, and administrative expenses. As of the periods presented, the Company’s finance leases were not material to the Consolidated Balance Sheets, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows. 10 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The following components of operating lease expense were recognized in the Company’s Consolidated Statements of Operations: Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands) Fixed operating lease cost $ 19,821 $ 21,199 Variable operating lease cost 6,357 5,759 Total operating lease cost $ 26,178 $ 26,958 The following table provides the weighted-average remaining lease term of the Company’s operating leases, the weighted-average discount rate used to calculate the Company’s operating liabilities, cash paid for amounts included in the measurement of the Company’s operating lease liabilities, and right-of-use (“ROU”) assets obtained in exchange for the Company’s new operating lease liabilities: Thirteen Weeks Ended May 2, 2026 May 3, 2025 Weighted-average remaining lease term (years) 5.0 4.4 Weighted average discount rate 9.2 % 8.6 % Cash paid for amounts included in the measurement of operating lease liabilities ($, in thousands) 13,454 17,425 ROU assets obtained in exchange for new operating lease liabilities ($, in thousands) 70,673 23,088 As of May 2, 2026, the maturities of operating lease liabilities were as follows: May 2, 2026 (in thousands) Remainder of 2026 $ 67,237 2027 65,965 2028 52,719 2029 29,588 2030 21,903 Thereafter 60,814 Total operating lease payments 298,226 Less: imputed interest ( 64,117 ) Present value of operating lease liabilities $ 234,109 6. DEBT ABL Credit Facility The Company and certain subsidiaries maintain the $ 350.0 million asset-based revolving credit facility (the “ABL Credit Facility”) under its Amended and Restated Credit Agreement dated May 9, 2019 (as amended from time to time, the “Credit Agreement”), with Wells Fargo Bank, National Association (“Wells Fargo”), as the sole lender party thereto, and as Administrative Agent, Collateral Agent, and Swing Line Lender. The ABL Credit Facility will mature on the earlier of December 16, 2030, or the maturity date under the Company’s term loan agreement with SLR Credit Solutions (“SLR”) as further described below. As of December 16, 2025, which is the effective date of the eighth amendment to the Credit Agreement (the “Eighth Amendment”), the ABL Credit Facility includes a $ 25.0 million Canadian sublimit and a $ 30.0 million sublimit for standby and documentary letters of credit. 11 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) As of February 1, 2026, and on the first day of each fiscal quarter thereafter, based on the amount of the Company’s average daily excess availability under the facility, borrowings outstanding under the ABL Credit Facility bear interest, at the Company’s option at: (i) the prime rate per annum, plus a margin of 1.000 %, 1.250 % or 1.500 %; or (ii) the Secured Overnight Financing Rate (“SOFR”) per annum, plus a margin of 2.000 %, 2.250 % or 2.500 %. As of April 18, 2024, based on the size of the unused portion of the commitments, the Company is charged a fee ranging from 0.250 % to 0.375 %. As of February 1, 2026, letter of credit fees range from 0.500 % to 0.750 % for commercial letters of credit and range from 1.000 % to 1.500 % for standby letters of credit. These fees are determined based on the amount of the Company’s average daily excess availability under the facility. As of December 16, 2025, the amount available for loans and letters of credit under the ABL Credit Facility is determined by a borrowing base consisting of certain credit card receivables, certain trade receivables, and certain inventory, subject to certain reserves. For the First Quarter 2026 and First Quarter 2025, the Company recognized $ 2.2 million and $ 4.8 million, respectively, in interest expense related to the ABL Credit Facility. As of December 16, 2025, credit extended under the ABL Credit Facility is secured by a first priority security interest in substantially all of the Company’s U.S. and Canadian assets, other than intellectual property, real estate, certain furniture, fixtures and equipment, and pledges of subsidiary capital stock, and a second priority security interest in the Company’s intellectual property, real estate, certain furniture, fixtures and equipment, and pledges of subsidiary capital stock. The outstanding obligations under the ABL Credit Facility may be accelerated upon the occurrence of certain customary events of default, as described below. The Company is not subject to any early termination fees. The ABL Credit Facility contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments. These covenants also limit the ability of the Company and its subsidiaries to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, or dispositions or to change the nature of its business. Pursuant to a prior amendment, the requisite payment condition thresholds for some of these covenants were heightened, resulting in certain actions such as the repurchase of shares and payment of cash dividends becoming more difficult to perform. Additionally, if the Company is unable to maintain a certain amount of excess availability for borrowings, the Company may be subject to cash dominion, and pursuant to the Eighth Amendment, the Company is required to maintain excess availability of at least $ 35.0 million, subject to increase based on the Company’s borrowing base (the “excess availability requirement”). The Company was in compliance with this excess availability requirement as of May 2, 2026. 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. As of May 2, 2026, January 31, 2026, and May 3, 2025, unamortized deferred financing costs amounted to $ 5.3 million, $ 5.6 million, and $ 3.3 million, related to the Company’s ABL Credit Facility. 12 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The table below presents the components of the Company’s ABL Credit Facility: May 2, 2026 January 31, 2026 May 3, 2025 (in millions) Borrowing base $ 246.7 $ 234.2 $ 315.5 Credit facility size 350.0 350.0 433.0 Maximum borrowing availability (1) 211.7 199.2 315.5 Outstanding borrowings 150.0 131.1 258.6 Letters of credit outstanding—standby 23.7 23.7 18.2 Utilization of credit facility at end of period 173.7 154.8 276.8 Availability (2) $ 38.0 $ 44.4 $ 38.7 Interest rate at end of period 6.5 % 6.5 % 7.7 % Average interest rate 6.6 % 7.6 % 7.7 % Average end-of-day loan balance during the period $ 124.1 $ 248.7 $ 247.2 Highest end-of-day loan balance during the period $ 150.0 $ 302.7 $ 262.3 ____________________________________________ (1) Prior to the Eighth Amendment, the lower of the credit facility size and the borrowing base, without factoring in any excess availability requirement. Pursuant to the Eighth Amendment, as of December 16, 2025, the Company’s maximum borrowing availability is the lower of the credit facility size and the borrowing base, net of the new excess availability requirement. (2) The sublimit availability for letters of credit was $ 6.3 million as of May 2, 2026, $ 6.3 million as of January 31, 2026, and $ 6.8 million as of May 3, 2025. SLR Term Loan On December 16, 2025, the Company and certain of its subsidiaries entered into a term loan agreement (the “SLR Loan Agreement”) with SLR and other affiliated SLR entities as the lenders party thereto, and SLR as Administrative Agent, and Collateral Agent, providing for a $ 100.0 million term loan (the “SLR Term Loan”). The Company used the net proceeds from the SLR Term Loan to partially pay down its borrowings under the ABL Credit Facility. The SLR Term Loan (i) matures on the earlier of December 16, 2030, or the maturity date under the ABL Credit Facility, (ii) bears interest, payable monthly, (a) until June 16, 2026, at the SOFR per annum plus 5.250 % for any portion that is a SOFR loan, or at the base rate per annum plus 4.250 % for any portion that is a base rate loan; or (b) from and after June 17, 2026, at the SOFR per annum plus 5.250 % or 6.250 % for any portion that is a SOFR loan, or at the base rate per annum plus 4.250 % or 5.250 % for any portion that is a base rate loan, based on the Company’s consolidated fixed charge coverage ratio for the trailing twelve-month period as of the most recent fiscal quarter just ended. The SLR Term Loan is secured by a first priority security interest in the Company’s intellectual property, real estate, certain furniture, fixtures and equipment, and pledges of subsidiary capital stock, and a second priority security interest in the collateral secured by a first priority security interest under the ABL Credit Facility. The SLR Term Loan is guaranteed by each of the Company’s subsidiaries that guarantees the Company’s ABL Credit Facility. The SLR Term Loan is, in whole or in part, pre-payable any time and from time to time, subject to certain prepayment premiums specified in the SLR Loan Agreement, plus accrued and unpaid interest. The SLR Term Loan contains customary affirmative and negative covenants substantially similar to a subset of the covenants set forth in the Credit Agreement, including limits on the ability of the Company and its subsidiaries to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, dispositions or restricted payments, or to change the nature of its business. 13 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The SLR Term Loan contains certain customary events of default, which include (subject in certain cases to customary grace periods), nonpayment of principal, breach of other covenants of the SLR Term Loan, 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 SLR Term Loan. Additionally, the SLR Term Loan contains the same excess availability requirement as the ABL Credit Facility. The Company was in compliance with this excess availability requirement as of May 2, 2026. For the First Quarter 2026, the Company recognized $ 2.3 million in interest expense related to the SLR Term Loan. As of May 2, 2026, the interest rate was 8.9 %. As of May 2, 2026, unamortized deferred financing costs amounted to $ 2.3 million related to the SLR Term Loan. Mithaq Term Loans Mithaq Capital SPC, a Cayman segregated portfolio company (“Mithaq”), is a controlling stockholder of the Company. The Company and certain subsidiaries maintain an interest-free, unsecured and subordinated promissory note with Mithaq (the “Initial Mithaq Term Loan”), dated February 29, 2024, by and among the Company, certain of its subsidiaries, and Mithaq. During Fiscal 2025, $ 60.2 million under the Initial Mithaq Term Loan was repaid pursuant to the completion of the Company’s rights offering on February 6, 2025 (“Rights Offering”), leaving $ 18.4 million outstanding under the Initial Mithaq Term Loan as of May 2, 2026. The Initial Mithaq Term Loan matures on April 16, 2031 and is guaranteed by each of the Company’s subsidiaries that guarantees the Company’s ABL Credit Facility. The Company and certain subsidiaries also maintain an unsecured and subordinated promissory note with Mithaq for a $ 90.0 million term loan (the “New Mithaq Term Loan”; and together with the Initial Mithaq Term Loan, collectively, the “Mithaq Term Loans”), dated April 16, 2024, by and among the Company, certain of its subsidiaries, and Mithaq. The New Mithaq Term Loan also matures on April 16, 2031, and requires monthly payments equivalent to interest charged at the SOFR per annum plus 4.000 %, with the first year’s monthly payments to Mithaq deferred until April 30, 2025. On April 28, 2025, the Company and Mithaq entered into Amendment No. 1 to the New Mithaq Term Loan promissory note, which subjected these deferred monthly payments due as of April 30, 2025 to a payment plan, payable in installments prior to the end of Fiscal 2025. The New Mithaq Term Loan is guaranteed by each of the Company’s subsidiaries that guarantees the Company’s ABL Credit Facility. Pursuant to the Company’s refinancing transactions on December 16, 2025, the New Mithaq Term Loan was further amended to allow the Company to defer its monthly payments upon written notice to Mithaq, and as an amendment consent fee, its principal amount was increased by $ 2.7 million to $ 92.7 million, leaving an aggregate of $ 111.1 million outstanding under the Mithaq Term Loans. These amendments were evaluated under FASB ASC 470 — Debt , and accounted for as debt modifications. For the First Quarter 2026 and First Quarter 2025, the Company recognized $ 1.9 million in interest-equivalent expense related to the New Mithaq Term Loan. As of May 2, 2026, the interest-equivalent rate was 7.8 %. During the First Quarter 2026, the Company deferred all interest-equivalent payments to Mithaq, which is expected to be settled upon maturity of the New Mithaq Term Loan. There were no interest-equivalent payments to Mithaq during the First Quarter 2025. As of May 2, 2026, January 31, 2026, and May 3, 2025, interest-equivalent expense payable to Mithaq was $ 7.4 million, $ 5.6 million, and $ 8.4 million, respectively, which is recorded within Accrued expenses and other current liabilities. The Mithaq Term Loans are subject to an amended and restated subordination agreement (as amended from time to time, the “Mithaq Subordination Agreement”), dated as of April 16, 2024, by and among the Company and certain 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. Pursuant to the Company’s refinancing transactions in December 2025, the Mithaq Term Loans are also subordinated in payment priority to the obligations of the Company and its subsidiaries under the SLR Term Loan. Subject to such subordination terms, the Mithaq Term Loans are prepayable at any time and from time to time without penalty and do not require any mandatory prepayments. 14 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The Mithaq Term Loans contain customary affirmative and negative covenants substantially similar to a subset of the covenants set forth in the Credit Agreement, including limits on the ability of the Company and its subsidiaries to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, dispositions or restricted payments, or to change the nature of its business. The Mithaq Term Loans, however, do not provide for any closing, prepayment or exit fees, or other fees typical for transactions of this nature, do not impose additional reserves on borrowings under the Credit Agreement, and do not contain certain other restrictive covenants. 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 May 2, 2026, January 31, 2026, and May 3, 2025, unamortized deferred financing costs amounted to $ 3.4 million, $ 3.6 million, and $ 1.4 million, respectively, related to the Mithaq Term Loans. Maturities of the Company’s principal debt payments on the SLR Term Loan and Mithaq Term Loans are as follows: May 2, 2026 (in thousands) Remainder of 2026 $ — 2027 — 2028 — 2029 — 2030 100,000 2031 111,113 Total principal debt payments $ 211,113 Mithaq Commitment Letter On May 2, 2024, the Company entered into a commitment letter (the “Commitment Letter”) with Mithaq for a $ 40.0 million credit facility (the “Mithaq Credit Facility”). Initially, under the Mithaq Credit Facility, the Company had the ability to request for advances at any time prior to July 1, 2025. On December 16, 2025, the Company and Mithaq entered into an Amendment No. 3 to the Commitment Letter, that extended the deadline for requesting advances until December 16, 2030. If any debt is incurred under the Mithaq Credit Facility, it shall require monthly payments equivalent to interest charged at the SOFR per annum plus 9.000 %. Such debt shall be unsecured and shall be guaranteed by each of the Company’s subsidiaries that guarantees the Company’s ABL Credit Facility. Similar to the Mithaq Term Loans, such debt shall also be subject to the Mithaq Subordination Agreement, contain customary affirmative and negative covenants substantially similar to a subset of the covenants set forth in the Credit Agreement, and contain certain customary events of default. Additionally, such debt shall require no mandatory prepayments and shall mature no earlier than December 16, 2030. As of May 2, 2026, no debt had been incurred under the Mithaq Credit Facility. Monetization of Income Tax Receivable Claim On February 5, 2026, the Company entered into a Receivables Purchase Agreement (the “RPA”) with TRMEF Basis II LLC (“TRMEF”) to monetize its CARES Act income tax receivable claim of $ 19.1 million plus accrued interest of $ 3.7 million at a purchase rate of 88.5 %, for a total purchase price of $ 20.1 million. The Company received net cash proceeds of $ 15.9 million, after insurance and legal fees amounting to $ 0.7 million. The remaining proceeds of $ 3.5 million are expected to be received in two tranches as follows: (i) upon confirmation by the IRS of submission by the IRS of the Revenue Agent Report to the Joint Committee on Taxation, TRMEF shall pay $ 2.5 million to the Company, less the amount of any downward adjustments in respect of the tax refund claim set forth in such Revenue Agent Report, and (ii) on the date on which TRMEF receives payment in full in cash of the refund claim, TRMEF shall pay $ 1.0 million to the Company, less 10 % of accrued interest as of the effective date of the RPA. The monetization of the Company’s income tax receivable claim was accounted for in accordance with FASB ASC 470 — Debt , and presented as Short-term debt. As of May 2, 2026, the unamortized financing costs amounted to $ 3.0 million. These costs are being amortized through the expected settlement date of the claim and recorded in Interest expense based on an effective interest rate of 18.0 %. 15 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Monetization of IEEPA Tariff Refund Claims On March 31, 2026, the Company entered into a Claim Sale and Purchase Agreement with Alnus Investors, LLC (“Alnus”) to monetize its claims for refunds of tariffs previously paid to the U.S. Customs and Border Protection (“CBP”), related to those tariffs originally invoked under the International Emergency Economics Powers Act (“IEEPA”), for which such tariffs were ruled unlawful by the United States Supreme Court on February 20, 2026. Alnus purchased an aggregate amount of $ 38.2 million of the approximately $ 40 million refund claims submitted to the CBP at a purchase rate of 67.2 %, for a total purchase price of $ 25.7 million. The Company has received $ 5.5 million of these refunds from the CBP subsequent to the end of the First Quarter 2026 to date. The monetization of the Company’s tariff refund claims was accounted for in accordance with FASB ASC 470 — Debt , and presented as Short-term debt. As of May 2, 2026, the unamortized financing costs amounted to $ 10.5 million. These costs are being amortized through the expected settlement date of the claim and recorded in Interest expense based on an effective interest rate of 153.1 %. Refer to “Note 1. Basis of Preparation” for the related accounting policy update on tariff refund claims. 7. COMMITMENTS AND CONTINGENCIES The Company is a defendant in Gabriela Gonzalez v. The Children’s Place, Inc. , a purported class action, pending in the U.S. District Court, Central District of California. The plaintiff alleged that the Company had falsely advertised discounts that do not exist, in violation of California’s Unfair Competition Laws, False Advertising Law and the California Consumer Legal Remedies Act. The Company filed a motion to compel arbitration, which the plaintiff did not oppose, and the court granted the motion on August 17, 2022—staying the case pending the outcome of the arbitration. The demand for arbitration was filed on October 4, 2022, in connection with the individual claim of the plaintiff. A mass arbitration firm associated with plaintiff’s counsel then conducted an advertising campaign for claimants to conduct a mass arbitration. In part, to avoid the mass arbitration, the parties stipulated to return the original plaintiff’s claim to court to proceed as a class action. Accordingly, the arbitration would not be proceeding and the Company’s response to the original plaintiff’s complaint in court was filed on July 20, 2023. On August 16, 2023, however, the Company began to receive notices regarding an initial tranche of approximately 1,300 individual demands that were filed with Judicial Arbitration and Mediation Services, Inc. (“JAMS”) as part of a related mass arbitration claim. The parties participated in mediation proceedings on November 15, 2023 and February 9, 2024. The parties agreed to further discuss settlement options in May 2024, which occurred without resolution. In late May 2024, due to the judge’s retirement, the Gonzalez action was transferred and reassigned to a different judge. Deadlines were therefore reset, including the Company’s motion to dismiss. 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. The Company’s motion to dismiss was denied in November 2024. The Company subsequently filed a Motion for Reconsideration in December 2024, which was denied by the court in October 2025. Class certification discovery is ongoing, with class certification proceedings expected to take place in late fiscal 2026. Any 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 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. 8. STOCKHOLDERS’ EQUITY (DEFICIT) Share Repurchase Program In November 2021, the Company’s board of directors authorized a $ 250.0 million share repurchase program (the “Share Repurchase Program”). Under this program, the Company may repurchase shares on the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue the program at any time and may thereafter reinstitute purchases, all without prior announcement. Currently, pursuant to the terms of the Company’s Credit Agreement and SLR Loan Agreement, the repurchase of any shares would require fulfilling stringent payment conditions under those agreements, except that repurchases of shares as described below, pursuant to the Company’s practice as a result of its insider trading policy, are expressly permitted. As of May 2, 2026, there was $ 156.1 million remaining availability under the Share Repurchase Program. 16 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) 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. The Company’s payment of the withholding taxes in exchange for the surrendered shares constitutes a repurchase of its common stock. The Company also acquires shares of its common stock in conjunction with liabilities owed under the Company’s deferred compensation plan, which are held in treasury. The following table summarizes the Company’s share repurchases: Thirteen Weeks Ended May 2, 2026 May 3, 2025 Shares Amount Shares Amount (in thousands) Share repurchases related to: Share repurchase program 9 $ 29 15 $ 84 In accordance with the FASB ASC 505 — Equity , the par value of the shares retired is charged against Common stock and the remaining purchase price is allocated between Additional paid-in capital and Accumulated deficit. The portion charged against Additional paid-in capital is determined using a pro-rata allocation based on total shares outstanding. Dividends Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s board of directors based on a number of factors, including business and market conditions, the Company’s financial performance, and other investment priorities. The Company has no current plans to pay regular cash dividends in Fiscal 2026 pursuant to the terms of the Company’s Credit Agreement and SLR Loan Agreement, which impose certain restrictions on the Company’s ability to pay dividends. 9. STOCK-BASED COMPENSATION The Company generally grants time-vesting stock awards (“Deferred Awards”) and performance-based stock awards (“Performance Awards”) to employees at senior management levels. The Company also grants Deferred Awards to its non-employee independent directors. The following table summarizes the Company’s stock-based compensation expense (benefit): Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands) Deferred Awards $ 96 $ 1,239 Performance Awards ( 521 ) 507 Total stock-based compensation expense (benefit) (1) $ ( 425 ) $ 1,746 ___________________________________________ (1) Stock-based compensation expense (benefit) recorded within Cost of sales (exclusive of depreciation and amortization) amounted to $( 0.2 ) million and $ 0.3 million in the First Quarter 2026 and First Quarter 2025, respectively. All other stock-based compensation expense (benefit) is included in Selling, general, and administrative expenses. 17 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) 10. 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 May 2, 2026 May 3, 2025 (in thousands) Net loss $ ( 53,191 ) $ ( 34,023 ) Basic weighted average common shares outstanding 22,209 21,629 Diluted weighted average common shares outstanding 22,209 21,629 Anti-dilutive shares excluded from diluted loss per common share calculation 87 93 11. FAIR VALUE MEASUREMENT The Company’s cash and cash equivalents and investments in the rabbi trust are short-term in nature. As such, their carrying amounts approximate fair value. These assets and liabilities fall within Level 1 of the fair value hierarchy. The Company stock included in the deferred compensation plan is not subject to fair value measurement. The fair value of the Initial Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $ 18.4 million as of May 2, 2026, was approximately $ 11.9 million. The fair value of the New Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $ 92.7 million as of May 2, 2026, was approximately $ 87.1 million. The fair value of the Mithaq Term Loans 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. The carrying amount of the Company’s remaining short-term and long-term borrowings, which are considered Level 2 liabilities, approximates fair value based on current rates and terms available to the Company for similar debt. The Company’s non-financial assets measured at fair value on a nonrecurring basis include long-lived assets, such as intangible assets, fixed assets, and ROU assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to fall within Level 3 of the fair value hierarchy. Impairment of Long-Lived Assets The fair value of the Company’s long-lived assets is primarily calculated using a discounted cash-flow model directly associated with those assets, which consist principally of property and equipment and ROU assets. 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 store-related long-lived assets and did no t record an impairment charge in the First Quarter 2026 and First Quarter 2025. Impairment of Indefinite-Lived Intangible Assets The Company estimates the fair value of its indefinite-lived Gymboree tradename based on an income approach using the relief-from-royalty method. 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 performs a periodic impairment assessment of the Gymboree tradename, in accordance with FASB ASC 350 — Intangibles — Goodwill and Other . Based on this assessment, the Company did not identify any indicators of impairment in the First Quarter 2026 and First Quarter 2025. 18 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) 12. INCOME TAXES The Company utilizes the asset and liability method of accounting for income taxes as set forth in FASB ASC 740 — Income Taxes . Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities, as well as for net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using currently enacted tax rates applied to taxable income in effect for the years in which the basis differences and tax assets are expected to be realized. The Company’s provision for income taxes was $ 1.3 million during the First Quarter 2026 and the First Quarter 2025. The Company’s effective tax rate was ( 2.5 )% in the First Quarter 2026, compared to ( 4.1 )% in the First Quarter 2025. The change in the effective tax rate is primarily due to a higher pretax loss during the First Quarter 2026 compared to the First Quarter 2025. The Company continues to adjust its valuation allowance based upon its ongoing operating results. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act allows net operating losses (“NOLs”) incurred in taxable years 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to offset 100 % of taxable income and to generate a refund of previously paid income taxes. Pursuant to the CARES Act, the Company carried back the taxable year 2020 tax loss of $ 150.0 million to prior years. As of May 2, 2026, the remaining income tax receivable of $ 19.1 million is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets. During the First Quarter 2026, the Company entered into an agreement with TRMEF to monetize its income tax receivable claim. Refer to “Note 6. Debt” for more information. The Company accrues interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. The total amount of unrecognized tax benefits was $ 5.0 million, $ 4.9 million, and $ 6.6 million as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively, and is included within Long-term liabilities. Additional interest expense recognized in the First Quarter 2026 and First Quarter 2025 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. The Company files a consolidated U.S. income tax return for federal income tax purposes. The Company is no longer subject to income tax examinations by U.S. federal, state and local or foreign tax authorities for tax years 2015 and prior. The Internal Revenue Service is currently conducting an examination of the Company’s tax return for fiscal year 2020 in conjunction with its review of the CARES Act NOL carryback to earlier fiscal years. The Company believes that its reserves for uncertain tax positions are adequate to cover existing risks or exposures. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues arise as a result of a tax audit, and are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. 13. SEGMENT INFORMATION The Company’s reportable segments are based on the financial information the chief operating decision maker (“CODM”) uses to allocate resources and assess performance of its business. The Company’s President and Chief Executive Officer is the CODM. The Company’s CODM evaluates the performance of each segment and measures its segment profitability based on operating income (loss), defined as income (loss) before interest and taxes. Operating income (loss) is used as a key metric during the annual budget process, and on a quarterly basis to monitor actual performance against the annual budget and forecasts. The Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place International. Each segment includes an e-commerce business located at www.childrensplace.com and www.gymboree.com . Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and net sales from the Company’s U.S.-based wholesale business. Included in The Children’s Place International segment are the Company’s Canadian-based stores and net sales from international franchisees. Net sales and direct costs are recorded by each segment. Certain inventory procurement functions, such as production and design, as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services, are managed by The Children’s Place U.S. segment. Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place International segment based primarily on net sales. The assets related to these functions are not allocated. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. 19 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Major Customers Net sales to external customers are derived from merchandise sales, and the Company has no customer that individually accounted for more than 10% of its Net sales during the First Quarter 2026. The Company had one U.S. wholesale customer that individually accounted for more than 10% of its Net sales during the First Quarter 2025, with net sales amounting to $ 32.2 million. The customer also accounted for a majority of the Company’s accounts receivable, amounting to $ 25.2 million, as of May 3, 2025. Store Count by Segment As of May 2, 2026, The Children’s Place U.S. had 442 stores and The Children’s Place International had 55 stores. As of May 3, 2025, The Children’s Place U.S. had 437 stores and The Children’s Place International had 58 stores. The tables below present certain segment information, including significant segment expenses, for our reportable segments for the periods indicated: Thirteen Weeks Ended May 2, 2026 The Children’s Place U.S. The Children’s Place International (1) Total Net sales $ 195,291 $ 19,934 $ 215,225 Cost of sales (exclusive of depreciation and amortization) (2) 142,031 19,843 161,874 Selling, general, and administrative expenses (3) 81,054 7,810 88,864 Depreciation and amortization 6,248 418 6,666 Segment operating loss $ ( 34,042 ) $ ( 8,137 ) $ ( 42,179 ) Segment operating loss as a percentage of net sales ( 17.4 ) % ( 40.8 ) % ( 19.6 ) % Thirteen Weeks Ended May 3, 2025 The Children’s Place U.S. The Children’s Place International (1) Total Net sales $ 221,767 $ 20,358 $ 242,125 Cost of sales (exclusive of depreciation and amortization) (2) 153,986 17,356 171,342 Selling, general, and administrative expenses (3) 79,840 6,830 86,670 Depreciation and amortization 7,656 574 8,230 Segment operating loss $ ( 19,715 ) $ ( 4,402 ) $ ( 24,117 ) Segment operating loss as a percentage of net sales ( 8.9 )% ( 21.6 )% ( 10.0 )% ___________________________________________ (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. dollars. (2) Cost of sales includes the cost of inventory sold, certain buying, design, and distribution expenses, shipping and handling costs on merchandise sold directly to customers, and all occupancy costs, except for administrative office buildings. (3) Selling, general, and administrative expenses include store expenses, marketing, corporate payroll, including long-term incentive compensation, information technology, and other administrative expenses. 20 THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The table below presents a reconciliation of reportable segment operating loss to Loss before provision for income taxes: Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands) Total segment operating loss $ ( 42,179 ) $ ( 24,117 ) Related party interest expense ( 1,942 ) ( 1,871 ) Other interest expense ( 7,756 ) ( 6,701 ) Interest income 8 10 Loss before provision for income taxes $ ( 51,869 ) $ ( 32,679 ) Additional Segment Data Thirteen Weeks Ended May 2, 2026 May 3, 2025 (in thousands) Capital expenditures: The Children’s Place U.S. $ 7,914 $ 3,273 The Children’s Place International 120 140 Total capital expenditures $ 8,034 $ 3,413 May 2, 2026 January 31, 2026 May 3, 2025 (in thousands) Total assets: The Children’s Place U.S. $ 693,797 $ 631,198 $ 739,736 The Children’s Place International 35,379 39,101 39,866 Total assets $ 729,176 $ 670,299 $ 779,602 Long-lived assets: United States $ 308,952 $ 258,645 $ 264,293 Canada 12,197 10,615 12,739 Asia 4,795 3,042 1,961 Total long-lived assets (1) $ 325,944 $ 272,302 $ 278,993 ___________________________________________ (1) The Company’s long-lived assets are comprised of net Property and equipment, ROU assets, Tradenames, and Other assets, and are recorded in the long-term assets section of the consolidated balance sheets. 21