Children's Place, Inc. (The) (PLCE)

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Business section and other parts of this Annual Report on Form 10-K may contain certain forward-looking statements regarding future circumstances. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “predicts”, and similar terms. These forward-looking statements are based upon current expectations and assumptions of The Children’s Place, Inc. and its subsidiaries (the “Company”) and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, but not limited to, those discussed in the subsection entitled “Risk Factors” under Part I, Item 1A of this Annual Report on Form 10-K. Actual results, events, and performance may differ significantly from the results discussed in the forward-looking statements. Readers of this Annual Report on Form 10-K are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this Annual Report on Form 10-K does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

The following discussion should be read in conjunction with the Company’s audited financial statements and notes thereto included elsewhere in this Annual Report on Form 10‑K.

PART I

ITEM 1. BUSINESS.

As used in this Annual Report on Form 10-K, references to the “Company”, “The Children’s Place”, “we”, “us”, “our”, and similar terms refer to The Children's Place, Inc. and its subsidiaries. Our fiscal year ends on the Saturday on or nearest to January 31. Other terms that are commonly used in this Annual Report on Form 10-K are defined as follows:

•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

•Fiscal 2023 — The fifty-three weeks ended February 3, 2024

•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

•Comparable Retail Sales — Net sales, in constant currency, from stores that have been open for at least 14 consecutive months and from our e-commerce store, excluding postage and handling fees. Store closures in the current fiscal year will be excluded from Comparable Retail Sales beginning in the fiscal quarter in which the store closes. A store that is closed for a substantial remodel, relocation, or material change in size will be excluded from Comparable Retail Sales for at least 14 months beginning in the fiscal quarter in which the closure occurred. However, stores that temporarily close will be excluded from Comparable Retail Sales until the store is re-opened for a full fiscal month

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General

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. We design, contract to manufacture, and sell fashionable, high-quality apparel, accessories and footwear predominantly at value prices, primarily under our proprietary brands: “The Children’s Place” and “Gymboree”. Our global retail and wholesale network includes two digital storefronts, 498 stores in North America, wholesale marketplaces, 223 international points of distribution in 12 countries through nine international franchise and wholesale partners, and social media channels on Instagram, Facebook, and X, formerly known as Twitter. Our physical stores offer a friendly and convenient shopping environment, segmented into departments that serve the wardrobe needs of girls and boys (sizes 4-22), toddler girls and boys (sizes 6 months-5T), and baby (sizes 0-24 months). Our digital storefronts are at www.childrensplace.com and www.gymboree.com, where our customers are able to shop online for the same merchandise available in our physical stores, as well as certain exclusive merchandise offered only on our e-commerce sites.

The Children’s Place was founded in 1969 and became publicly traded on the Nasdaq Global Select Market in 1997. During Fiscal 2024, Mithaq Capital SPC, a Cayman segregated portfolio company (“Mithaq”), acquired more than 50% of The Children’s Place, Inc.’s outstanding shares of common stock and became a controlling stockholder of the Company. During Fiscal 2025, Mithaq further increased its shareholding in the Company as a result of the completion of our rights offering, as described in “Note 10. Stockholders’ Deficit” of the Consolidated Financial Statements of this Form 10-K.

As part of the Company’s business strategy in this ever-evolving retail environment, our senior management team established several key priorities:

1.Superior Product - Product remains our number one priority. We are focused on providing the right product, in the right channels of distribution, at the right time. We offer a full line of apparel, footwear and accessories so busy moms can quickly and easily put together head-to-toe outfits. Our design, merchandising, sourcing, and planning teams strive to ensure that our product is trend-right, while at the same time balancing fashion and basics with more frequent, wear-now deliveries. We are focusing on optimizing our assortment and purchasing inventory at levels which will drive margin growth.

2.Digital Expansion - Our digital capabilities continue to expand with the development of completely redesigned responsive sites and mobile applications, providing an online shopping experience geared toward the needs of our “on-the-go” customers with expanded customer personalization, which delivers unique, relevant content designed to drive sales, loyalty and retention, and the ability to have our entire store fleet equipped with ship-from-store capabilities.

3.Omni-Channel Customer Experience - We continue to transform our omni-channel experience by making shopping even more effortless, accessible and exciting to our customers through our brick-and-mortar retail channel, our digital presence, and our wholesale channels. We continue to have a renewed focus on our store portfolio and are exploring opportunities for expanding and refurbishing our current fleet and strengthening our landlord relationships. Our wholesale business includes our relationship with Amazon, which is an important customer acquisition vehicle. We generate revenue from our franchisees from the sale of products and sales royalties.

Segment Reporting

We report 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 our U.S. and Puerto Rico-based stores and revenue from our U.S.-based wholesale business. Included in The Children’s Place International segment are our Canadian-based stores and revenue from international franchisees. We measure our segment profitability based on operating income (loss), defined as income (loss) before interest and taxes. 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. We periodically review these allocations and adjust them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales, and we have one U.S. wholesale customer that individually accounted for more than 10% of our net sales.

See “Note 16. Segment Information” of the Consolidated Financial Statements, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further segment financial data.

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Key Capabilities

Merchandising Strategy

Our merchandising strategy is consumer-focused and product-driven to support the growth of the business. Our product strategy balances fashion and basics for our consumers with a good/better/best pricing approach across all channels of distribution.

High Quality and Value

Our competitive advantage in the market includes creating high quality, affordable apparel, accessories, and footwear.

Brand Image

We focus on our brand image and strengthening our customer loyalty by striving to:

•Offer high quality and age-appropriate products aligned to current consumer preferences at accessible value price points across digital and retail channels;

•Deliver coordinated assortments and outfitting solutions designed to support everyday family lifestyle needs;

•Create segmented assortments to maximize consumer preferences and expectations in all channels of distribution;

•Reinforce brand value and product positioning through consistent, data-informed marketing content across channels;

•Create consistent merchandising and visual presentation standards across digital and physical retail environments to support brand consistency and conversion;

•Leverage first-party customer data to enable targeted communications, personalization, and improve customer engagement and retention;

•Utilize our MyPLACE Loyalty Rewards program and private label credit card ecosystem to support customer frequency, retention, and lifetime value; and

•Optimize an integrated, full-funnel marketing strategy across brand, performance, customer relationship management, and retail channels designed to drive customer acquisition, engagement, and conversion while improving marketing efficiency and productivity.

Low-Cost Global Sourcing

We design, source, and contract to manufacture the substantial majority of our branded products. We believe that this is essential to assuring the consistency and quality of our merchandise, as well as our ability to deliver value to our customers. We have strong multi-year relationships with the substantial majority of our vendors. Through these relationships and our extensive knowledge of low cost sourcing on a global scale, we are able to offer our customers high-quality products at predominantly value prices. We maintain a network of sourcing offices globally in order to manage our vendors efficiently and respond to changing business needs effectively. Our sourcing offices in Hong Kong, Pakistan, Kenya, China, India, Ethiopia, and Indonesia give us access to a wide range of vendors and allow us to work to maintain or reduce our merchandise costs by capitalizing on new sourcing opportunities while maintaining our high standard for product quality. Our diversified sourcing strategy and strong vendor partnerships enable us to pivot to different sourcing locations as needed to reduce the impact of macroeconomic factors such as changes in country-specific tariffs.

Merchandising Process

The strong collaboration between our cross-functional teams in merchandising, design, sourcing, planning, and marketing have enabled us to build our brands.

Merchandising

The merchandising function outlines the product architecture, pricing strategy, category breakdown, and consumer focus that serves as a foundation for our collections. A segmented assortment strategy and relevant distribution decisions ensure success at a channel level, along with carefully crafted messaging for marketing to leverage.

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-09-14 (period ending 2026-08-01).

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report on Form 10-Q contains or may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and results of operations, including adjusted net income (loss) per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate,” “believe,” and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the "Risk Factors" section of its annual report on Form 10-K for the fiscal year ended January 31, 2026. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unable to achieve operating results at levels sufficient to fund and/or finance the Company’s current level of operations and repayment of indebtedness, the risk that changes in trade policy and tariff regimes, including newly imposed U.S. tariffs and any responsive non-U.S. tariffs, may impact the Company’s international manufacturing and operations or customers’ discretionary spending habits, the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by changes in economic conditions (including inflation), the risk that changes in the Company’s plans and strategies with respect to pricing, capital allocation, capital structure, investor communications and/or operations may have a negative effect on the Company’s business, the risk that the Company’s strategic initiatives to increase sales and margin, improve operational efficiencies, enhance operating controls, decentralize operational authority and reshape the Company’s culture are delayed or do not result in anticipated improvements, the risk of delays, interruptions, disruptions and higher costs in the Company’s global supply chain, including resulting from disease outbreaks, foreign sources of supply in less developed countries, more politically unstable countries, or countries where vendors fail to comply with industry standards or ethical business practices, including the use of forced, indentured or child labor, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, various types of litigation, including class action litigation brought under securities, consumer protection, employment, and privacy and information security laws and regulations, risks related to the existence of a controlling stockholder, and the uncertainty of weather patterns, as well as other risks discussed in the Company’s filings with the SEC from time to time. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

As used in this Quarterly Report on Form 10-Q, references to the “Company”, “The Children’s Place”, “we”, “us”, “our”, and similar terms refer to The Children’s Place, Inc. and its subsidiaries.

The following discussion should be read in conjunction with the Company’s unaudited financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the annual audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2026.

Terms that are commonly used in our Management’s Discussion and Analysis of Financial Condition and Results of Operations are defined as follows:

•Second Quarter 2026 — The thirteen weeks ended August 1, 2026

•Second Quarter 2025 — The thirteen weeks ended August 2, 2025

•Year-To-Date 2026 — The twenty-six weeks ended August 1, 2026

•Year-To-Date 2025 — The twenty-six weeks ended August 2, 2025

•Fiscal 2026 — The fifty-two weeks ending January 30, 2027

•Fiscal 2025 — The fifty-two weeks ended January 31, 2026

•SEC — U.S. Securities and Exchange Commission

•U.S. GAAP — Generally Accepted Accounting Principles in the United States

•FASB — Financial Accounting Standards Board

•Comparable Retail Sales — Net sales from stores that have been open for at least 14 consecutive months and from our e-commerce store, excluding postage and handling fees. Store closures in the current fiscal year will be excluded from Comparable Retail Sales beginning in the fiscal quarter in which the store closes. A store that is closed for a substantial remodel, relocation, or material change in size will be excluded from Comparable Retail Sales for at least 14 months beginning in the fiscal quarter in which the closure occurred. However, stores that temporarily close will be excluded from Comparable Retail Sales until the store is reopened for a full fiscal month.

•Cost of Sales — Cost of inventory sold, including certain buying, design, and distribution expenses, and shipping and handling costs on merchandise sold, and all occupancy costs, except for administrative office buildings

•Gross Margin — Gross profit expressed as a percentage of Net sales

•SG&A — Selling, general, and administrative expenses

OVERVIEW

Our Business

We are one of the only pure-play children’s specialty retailers in North America with an omni-channel presence. We design, contract to manufacture, and sell fashionable, high quality apparel, accessories and footwear predominantly at value prices, primarily under our proprietary brands: “The Children’s Place” and “Gymboree”. Our global retail and wholesale network includes two digital storefronts, 514 stores in North America, wholesale marketplaces, 323 international points of distribution in 13 countries through our ten international franchise and wholesale partners, and social media channels on Instagram, Facebook, and X, formerly known as Twitter. Our digital storefronts are at www.childrensplace.com and www.gymboree.com, where our customers are able to shop online for the same merchandise available in our physical stores, as well as certain exclusive merchandise offered only on our e-commerce sites.

Segment Reporting

In accordance with FASB ASC 280 — Segment Reporting, we report 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 our U.S. and Puerto Rico-based stores and net sales from our U.S.-based wholesale business. Included in The Children’s Place International segment are our Canadian-based stores and net sales from international franchisees. We measure our segment profitability based on operating income (loss), defined as income (loss) before interest and taxes. 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. We periodically review these allocations and adjust them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales, and we have one U.S. wholesale customer that individually accounted for more than 10% of our Net sales for the Second Quarter 2026.

Recent Developments

Macroeconomic conditions, including inflationary pressures, higher gas prices, higher interest rates, tariffs, and other domestic and geopolitical factors, continued to adversely affect our core customer. During the Second Quarter 2026, these pressures contributed to a decrease in consumer discretionary apparel purchases. We expect these macroeconomic conditions, including but not limited to increased gas prices, transportation costs, distribution costs, and geopolitical conditions like changes in foreign policies of the United States, and other inflationary pressures, to continue to have an adverse impact during the remainder of Fiscal 2026.

During the first quarter of 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act of 1977 (“IEEPA”) were unlawful and thus deemed invalid. During Fiscal 2025 and Fiscal 2026, we paid approximately $40 million in IEEPA tariffs. During the Second Quarter 2026, we submitted tariff refund claims to the U.S. Customs and Border Protection (“CBP”) and received refunds amounting to approximately $39 million (excluding interest) which was recorded as a reduction of Cost of sales for inventory previously sold. As previously disclosed, we monetized most of these tariff refund claims at a discounted rate by selling the future receipt of these funds to a purchaser. The refunds received were used primarily to pay down our short-term debt. For more information about the monetization of these IEEPA tariff refund claims, see “Note 6. Debt” of the accompanying consolidated financial statements.

As previously disclosed, on July 6, 2026, Muhammad Umair resigned as President and Chief Executive Officer of the Company, but not as an employee, and the board of directors of the Company (the “Board”) appointed Muhammad Asif Seemab as President and Interim Chief Executive Officer. The Company indicated at that time that there were ongoing negotiations regarding Mr. Umair taking on a new role with the Company and potential adjustments to his compensation in connection with such change in role. On September 11, 2026, the Company entered into an employment adjustment letter (the “Adjustment Letter”) with Mr. Umair, effective as of July 1, 2026, pursuant to which Mr. Umair transitioned from the position of President and Chief Executive Officer to the position of Chief Strategy Officer of the Company. Mr. Umair will continue to serve as a member of the Board. Under the Adjustment Letter, Mr. Umair’s annual base salary was revised to $497,500, his existing equity awards granted in connection with his prior position were forfeited, and he would no longer be eligible to participate in the Company’s annual management incentive plan. All other terms and conditions of Mr. Umair’s employment, from his employment letter dated May 29, 2024 remain the same.

In connection with Mr. Umair’s transition, the Company granted Mr. Umair the following one-time awards pursuant to the Adjustment Letter: (i) a grant of 125,000 shares of the Company’s common stock, subject to certain restrictions on transfer and risks of forfeiture (the “Umair Restricted Shares”); (ii) a grant of 125,000 performance-based restricted stock units, each representing the right to receive one share of the Company’s common stock, subject to certain restrictions on transfer and risks of forfeiture (the “Umair PSUs”); and (iii) a one-time cash award of $350,000, payable within 30 days of the date of the Adjustment Letter. Each of the Umair Restricted Shares and Umair PSUs vest in two equal tranches upon the Company’s market capitalization (measured using a 90-day volume-weighted average price) equaling or exceeding $265 million and $400 million, respectively, subject to Mr. Umair’s continued employment with the Company. Any Umair Restricted Shares or Umair PSUs that have not vested by the third anniversary of the grant date will be forfeited and returned to the Company, subject to extensions up to the seventh anniversary of the grant date, at the Company’s discretion.

RESULTS OF OPERATIONS

We believe that our e-commerce and brick-and-mortar retail store operations are highly interdependent, with both sharing common customers purchasing from a common pool of product inventory. Accordingly, we believe that consolidated omni-channel reporting presents the most meaningful and appropriate measure of our performance. We primarily evaluate the results of our operations as a percentage of Net sales rather than in terms of absolute dollar increases or decreases by analyzing the year over year change in our business expressed as a percentage of Net sales (i.e., “basis points”). To the extent that our sales have increased at a faster rate than our costs (i.e., “leverage”), the more efficiently we have utilized the investments we have made in our business. Conversely, if our sales have decreased or if our costs have grown at a faster pace than our sales (i.e., “deleverage”), we have utilized the investments we have made in our business less efficiently.

Second Quarter 2026 Compared to Second Quarter 2025

	Thirteen Weeks Ended				Thirteen Weeks Ended				Variance
	August 1, 2026		% of Net Sales		August 2, 2025		% of Net Sales		$		%		% of Net Sales
	(amounts in thousands)
Net sales	$	241,800	100.0	%	$	298,006	100.0	%	$	(56,206)	(18.9)	%	—	%
Cost of sales (exclusive of depreciation and amortization)	158,522		65.6	%	196,734		66.0	%	38,212		19.4	%	0.4	%
Gross profit	83,278		34.4	%	101,272		34.0	%	(17,994)		(17.8)	%	0.4	%
Selling, general, and administrative expenses	90,061		37.2	%	89,596		30.1	%	(465)		(0.5)	%	(7.1)	%
Depreciation and amortization	6,254		2.6	%	7,570		2.5	%	1,316		17.4	%	(0.1)	%
Operating income (loss)	(13,037)		(5.4)	%	4,106		1.4	%	(17,143)		(417.5)	%	(6.8)	%
Related party interest expense	(2,099)		(0.9)	%	(1,868)		(0.6)	%	(231)		(12.4)	%	(0.3)	%
Other interest expense, net	(16,153)		(6.7)	%	(6,150)		(2.1)	%	(10,003)		(162.7)	%	(4.6)	%
Loss before provision (benefit) for income taxes	(31,289)		(12.9)	%	(3,912)		(1.3)	%	(27,377)		(699.8)	%	(11.6)	%
Provision (benefit) for income taxes	(338)		(0.1)	%	1,453		0.5	%	1,791		123.3	%	0.6	%
Net loss	$	(30,951)	(12.8)	%	$	(5,365)	(1.8)	%	$	(25,586)	(476.9)	%	(11.0)	%

Net sales decreased $56.2 million, or 18.9%, to $241.8 million during the Second Quarter 2026 from $298.0 million during the Second Quarter 2025. The decrease in net sales was driven by a decrease in direct-to-consumer (“DTC”) sales of 15.0% due to lower traffic compared to the Second Quarter 2025. Comparable retail sales in our owned and operated DTC business decreased 16.7% for the Second Quarter 2026. Our consolidated results were also impacted by the planned reduction in shipments for our wholesale channel to align inventory positions with our customers, and to liquidate aged fashion inventories.

Gross profit decreased $18.0 million to $83.3 million during the Second Quarter 2026, compared to $101.3 million during the Second Quarter 2025. Gross margin increased 40 basis points (“bps”) to 34.4% of Net sales in the Second Quarter 2026, compared to 34.0% of Net sales in the Second Quarter 2025. The increase in gross margin was caused primarily by the impact of tariff refunds recognized during the Second Quarter 2026 amounting to approximately $39 million, which was accounted for as a reduction of Cost of sales. Excluding the impact of these refunds, our gross margin decreased 1,550 bps, primarily due to a higher penetration of markdown sales (590 bps), higher tariffs on our product (330 bps), increased store occupancy costs due to new store openings (260 bps), and an increase in inventory reserves (250 bps), partially offset by favorable product mix and costs (100 bps). Adjusted gross profit decreased $17.6 million to $83.7 million during the Second Quarter 2026, compared to $101.3 million during the Second Quarter 2025. Adjusted gross margin increased 60 bps to 34.6% of Net sales during the Second Quarter 2026, compared to 34.0% during the Second Quarter 2025, inclusive of the impact of tariff refunds.

Gross profit is calculated as consolidated Net sales less Cost of sales (exclusive of depreciation and amortization). Gross margin is calculated as gross profit divided by consolidated Net sales. Gross profit as a percentage of Net sales is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, the timing and level of promotional activities, changes in foreign currency exchange rates, and fluctuations in input costs. These factors, among others, may cause gross profit as a percentage of Net sales to fluctuate from period to period.

Selling, general, and administrative expenses increased $0.5 million to $90.1 million during the Second Quarter 2026, compared to $89.6 million during the Second Quarter 2025, and deleveraged 710 bps to 37.2% of Net sales. The increase was primarily due to an increase in store expenses as we opened 19 new stores, combined with the impact of unfavorable foreign currency exchange movements, partially offset by lower marketing expense as we continue to focus on rationalizing our spend, and lower payroll costs from our transformation efforts. Adjusted SG&A expenses were $88.3 million during the Second Quarter 2026, compared to $87.6 million during the Second Quarter 2025, and deleveraged 710 bps to 36.5% of Net sales.

Depreciation and amortization was $6.3 million during the Second Quarter 2026, compared to $7.6 million during the Second Quarter 2025. The decrease was primarily driven by reduced depreciation of capitalized software.

Operating income (loss) was a loss of $(13.0) million during the Second Quarter 2026, compared to income of $4.1 million during the Second Quarter 2025 due to the factors described above, and deleveraged 680 bps to (5.4)% of Net sales. Adjusted operating loss was $(10.9) million in the Second Quarter 2026, compared to Adjusted operating income of $6.1 million in the Second Quarter 2025, and deleveraged 650 bps to (4.5)% of Net sales.

Related party interest expense was $2.1 million during the Second Quarter 2026 compared to $1.9 million during the Second Quarter 2025.

Net interest expense was $18.3 million during the Second Quarter 2026, compared to $8.0 million during the Second Quarter 2025. The increase was due to the amortization of financing costs associated with the monetization of our tariff refund claims and income tax receivable claim. Excluding the impact of these financing costs, net interest expense decreased $0.4 million due to lower average borrowings and interest rates on our debt facilities.

Provision (benefit) for income taxes was a benefit of $(0.3) million during the Second Quarter 2026, compared to a provision of $1.5 million during the Second Quarter 2025. Our effective tax rate was a benefit of 1.1% and a provision of (37.1)% in the Second Quarter 2026 and Second Quarter 2025, respectively. The change in the effective tax rate was primarily due to a higher pretax loss and changes in forecasted earnings mix. We continue to adjust our valuation allowance based on ongoing operating results.

Net loss was $(31.0) million, or $(1.39) per diluted share, during the Second Quarter 2026, compared to $(5.4) million, or $(0.24) per diluted share, during the Second Quarter 2025, due to the factors described above. Adjusted net loss was $(18.2) million, or $(0.82) per diluted share, during the Second Quarter 2026, compared to $(3.4) million, or $(0.15) per diluted share, during the Second Quarter 2025.

The following table sets forth Net sales and Operating income (loss), respectively, by segment, for the periods indicated:

	Thirteen Weeks Ended
	August 1, 2026			August 2, 2025
	(in thousands)
The Children’s Place U.S.	$	220,116		$	273,187
The Children’s Place International (1)	21,684			24,819
Total net sales	$	241,800		$	298,006
The Children’s Place U.S.	$	(7,622)		$	6,284
The Children’s Place International (1)	(5,415)			(2,178)
Total segment operating income (loss)	$	(13,037)		$	4,106
The Children’s Place U.S.	(3.5)		%	2.3		%
The Children’s Place International (1)	(25.0)		%	(8.8)		%
Total segment operating income (loss) as a percentage of net sales	(5.4)		%	1.4		%

___________________________________________

(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.

The Children’s Place U.S. Net sales decreased $53.1 million, or 19.4%, to $220.1 million during the Second Quarter 2026, compared to $273.2 million during the Second Quarter 2025, driven by a decrease in DTC sales due to lower traffic compared to the Second Quarter 2025. Our results were also impacted by the planned reduction in shipments for our wholesale channel to align inventory positions with our customers, and to liquidate aged fashion inventories.

The Children’s Place International Net sales decreased $3.1 million, or 12.5%, to $21.7 million during the Second Quarter 2026, compared to $24.8 million during the Second Quarter 2025, driven by a decrease in DTC sales due to lower traffic compared to the Second Quarter 2025.

The Children’s Place U.S. Operating loss was $(7.6) million during the Second Quarter 2026, compared to Operating income of $6.3 million during the Second Quarter 2025, primarily due to lower net sales, as described above.

The Children’s Place International Operating loss was $(5.4) million during the Second Quarter 2026, compared to $(2.2) million during the Second Quarter 2025, primarily due to higher merchandise costs which negatively impacted our margins.

Year-To-Date 2026 Compared to Year-To-Date 2025

	Twenty-six Weeks Ended				Twenty-six Weeks Ended				Variance
	August 1, 2026		% of Net Sales		August 2, 2025		% of Net Sales		$		%		% of Net Sales
	(amounts in thousands)
Net sales	$	457,025	100.0	%	$	540,131	100.0	%	$	(83,106)	(15.4)	%	—	%
Cost of sales (exclusive of depreciation and amortization)	320,397		70.1	%	368,076		68.1	%	47,679		13.0	%	(2.0)	%
Gross profit	136,628		29.9	%	172,055		31.9	%	(35,427)		(20.6)	%	(2.0)	%
Selling, general, and administrative expenses	178,925		39.1	%	176,266		32.6	%	(2,659)		(1.5)	%	(6.5)	%
Depreciation and amortization	12,920		2.8	%	15,800		2.9	%	2,880		18.2	%	0.1	%
Operating loss	(55,217)		(12.1)	%	(20,011)		(3.7)	%	(35,206)		(175.9)	%	(8.4)	%
Related party interest expense	(4,041)		(0.9)	%	(3,740)		(0.7)	%	(301)		(8.0)	%	(0.2)	%
Other interest expense, net	(23,900)		(5.2)	%	(12,840)		(2.4)	%	(11,060)		(86.1)	%	(2.8)	%
Loss before provision for income taxes	(83,158)		(18.2)	%	(36,591)		(6.8)	%	(46,567)		(127.3)	%	(11.4)	%
Provision for income taxes	984		0.2	%	2,797		0.5	%	1,813		64.8	%	0.3	%
Net loss	$	(84,142)	(18.4)	%	$	(39,388)	(7.3)	%	$	(44,754)	(113.6)	%	(11.1)	%

Net sales decreased $83.1 million, or 15.4%, to $457.0 million during Year-To-Date 2026 from $540.1 million during Year-To-Date 2025. The decrease in net sales was driven by a decrease in DTC sales due to lower traffic. Comparable retail sales in our owned and operated DTC business decreased 12.9% during Year-To-Date 2026. Our consolidated results were also impacted by the planned reduction in shipments for our wholesale channel to align inventory positions with our customers, and to liquidate aged fashion inventories.

Gross profit decreased $35.4 million to $136.6 million during Year-To-Date 2026, compared to $172.1 million during Year-To-Date 2025. Gross margin decreased 200 bps to 29.9% of Net sales during Year-To-Date 2026, compared to 31.9% of Net sales in Year-To-Date 2025. Excluding the impact of tariff refunds recognized during Year-To-Date 2026 amounting to approximately $39 million, which was accounted for as a reduction of Cost of sales, our gross margin decreased 1,040 bps primarily due to a higher penetration of markdown sales (420 bps), higher tariffs on our product (350 bps), increased store occupancy costs due to new store openings (190 bps), and an increase in inventory reserves (170 bps), partially offset by favorable product mix and costs (190 bps). Adjusted gross profit decreased $30.8 million to $141.3 million during Year-To-Date 2026, compared to $172.1 million during Year-To-Date 2025. Adjusted gross margin decreased 100 bps to 30.9% of Net sales during Year-To-Date 2026, compared to 31.9% of Net sales in Year-To-Date 2025, inclusive of the impact of tariff refunds.

Selling, general, and administrative expenses increased $2.7 million to $178.9 million during Year-To-Date 2026, compared to $176.3 million during Year-To-Date 2025, and deleveraged 650 bps to 39.1% of Net sales during Year-To-Date 2026. The increase was primarily due to an increase in store expenses as we opened 20 new stores, combined with the impact of unfavorable foreign currency exchange movements, partially offset by a reduction in marketing expense as we continue to focus on rationalizing our spend, and a decrease in long-term incentive compensation. Adjusted SG&A expenses were $175.8 million during Year-To-Date 2026, compared to $174.2 million during Year-To-Date 2025, and deleveraged 630 bps to 38.5% of Net sales.

Depreciation and amortization was $12.9 million during Year-To-Date 2026, compared to $15.8 million during Year-To-Date 2025. The decrease was primarily driven by reduced depreciation of capitalized software.

Operating loss was $(55.2) million during Year-To-Date 2026, compared to $(20.0) million during Year-To-Date 2025 due to the factors described above, and deleveraged 840 bps to (12.1)% of Net sales. Adjusted operating loss was $(47.1) million during Year-To-Date 2026, compared to $(17.9) million during Year-To-Date 2025.

Related party interest expense was $4.0 million during Year-To-Date 2026, compared to $3.7 million during Year-To-Date 2025.

Net interest expense, was $27.9 million during Year-To-Date 2026, compared to $16.6 million during Year-To-Date 2025. The increase was due to the amortization of financing costs associated with the monetization of our tariff refund claims and income tax receivable claim. Excluding the impact of these financing costs, net interest expense decreased $1.0 million due to lower average borrowings and interest rates on our debt facilities.

Provision for income taxes was $1.0 million during Year-To-Date 2026, compared to $2.8 million during Year-To-Date 2025. Our effective tax rate was a provision of (1.2)% and (7.6)% during Year-To-Date 2026 and Year-To-Date 2025, respectively. The change in the effective tax rate was primarily due to a higher pretax loss and changes in forecasted earnings mix. We continue to adjust our valuation allowance based on ongoing operating results.

Net loss was $(84.1) million, or $(3.79) per diluted share, during Year-To-Date 2026, compared to $(39.4) million, or $(1.80) per diluted share, during Year-To-Date 2025. Adjusted net loss was $(62.6) million, or $(2.82) per diluted share during Year-To-Date 2026, compared to $(36.3) million, or $(1.66) per diluted share, during Year-To-Date 2025.

The following table sets forth Net sales and Operating loss, respectively, by segment, for the periods indicated:

	Twenty-six Weeks Ended
		August 1, 2026			August 2, 2025
		(in thousands)
The Children’s Place U.S.		$	415,407		$	494,954
The Children’s Place International (1)		41,618			45,177
Total net sales		$	457,025		$	540,131
The Children’s Place U.S.		$	(41,665)		$	(13,431)
The Children’s Place International (1)		(13,552)			(6,580)
Total segment operating loss		$	(55,217)		$	(20,011)
The Children’s Place U.S.		(10.0)		%	(2.7)		%
The Children’s Place International (1)		(32.6)		%	(14.6)		%
Total segment operating loss as a percentage of net sales		(12.1)		%	(3.7)		%

___________________________________________

The Children’s Place U.S. Net sales decreased $79.6 million, or 16.1%, to $415.4 million during Year-To-Date 2026, compared to $495.0 million during Year-To-Date 2025, driven by a decrease in DTC sales due to lower traffic. Our results were also impacted by the planned reduction in shipments for our wholesale channel to align inventory positions with our customers, and to liquidate aged fashion inventories.

The Children’s Place International Net sales decreased $3.7 million, or 8.1%, to $41.6 million during Year-To-Date 2026, compared to $45.2 million during Year-To-Date 2025, driven by a decrease in DTC sales due to lower traffic.

The Children’s Place U.S. Operating loss was $(41.7) million during Year-To-Date 2026, compared to $(13.4) million during Year-To-Date 2025, primarily due to lower net sales, as described above.

The Children’s Place International Operating loss was $(13.6) million during Year-To-Date 2026, compared to $(6.6) million during Year-To-Date 2025, primarily due to higher merchandise costs which negatively impacted our margins.

Non-GAAP Reconciliation

We have presented certain measures on a non-GAAP basis. Adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted gross profit, adjusted selling, general, and administrative expenses, and adjusted operating income (loss) are non-GAAP measures. These measures are not intended to replace GAAP financial information, and may be different from non-GAAP measures reported by other companies. The most comparable GAAP measures are net income (loss), net income (loss) per diluted share, gross profit, selling, general, and administrative expenses, and operating income (loss), respectively. We believe the income and expense items excluded as non-GAAP adjustments are not reflective of the performance of our core business, and that providing this supplemental disclosure to investors will facilitate comparisons of the past and present performance of our core business.

	Thirteen Weeks Ended
	August 1, 2026
	(amounts in thousands, except per share amounts)
	Gross profit			Selling, general and administrative expenses			Operating loss			Net loss			Diluted loss per common share
As reported (GAAP)	$	83,278		$	90,061		$	(13,037)		$	(30,951)		$	(1.39)
Exit from third-party distribution facility (1)	390			—			390			390
Financing charges on monetization of tariff refund claims (2)	—			—			—			9,865
Restructuring costs (3)	—			(1,713)			1,713			1,713
Financing charges on monetization of income tax receivable claim (4)	—			—			—			762
Aggregate impact of non-GAAP adjustments	390			(1,713)			2,103			12,730
Income tax effect	—			—			—			—
As adjusted	$	83,668		$	88,348		$	(10,934)		$	(18,221)		$	(0.82)
% of Net Sales (GAAP)	34.4		%	37.2		%	(5.4)		%	(12.8)		%
% of Net Sales (As adjusted)	34.6		%	36.5		%	(4.5)		%	(7.5)		%

____________________________________________

(1)Related to costs incurred due to the early exit from our third-party distribution facility.

(2)Related to amortization of financing costs associated with the monetization of our tariff refund claims.

(3)Related to one-time severance costs incurred for the senior leadership team and other positions eliminated.

(4)Related to amortization of financing costs associated with the monetization of our income tax receivable claim.

Twenty-six Weeks Ended

August 1, 2026

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2026-09-14 10-Q Quarterly Report
2026-08-14 8-K Officer/Director Change; Financial Statements and Exhibits
2026-07-29 8-K/A Officer/Director Change; Financial Statements and Exhibits
2026-07-17 8-K Officer/Director Change; Financial Statements and Exhibits
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2026-07-07 8-K Material Agreement Entered; Material Financial Obligation; Officer/Director Change; Financial Statements and Exhibits
2026-06-12 10-Q Quarterly Report
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2026-04-10 10-K Annual Report
2026-04-10 DEF 14A Proxy Statement
2026-02-27 8-K Officer/Director Change
2026-02-12 8-K Officer/Director Change; Financial Statements and Exhibits
2025-12-16 10-Q Quarterly Report
2025-11-25 8-K Officer/Director Change; Financial Statements and Exhibits
2025-09-05 10-Q Quarterly Report

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