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Children’s Place Inc.’s stock lost more than a quarter of its value on Thursday after the retailer’s latest quarter fell short of analyst projections.
The company also warned it will miss Wall Street’s earnings estimate for its coming quarter.
Children’s Place shares
PLCE,
dropped 27% at midday.
While the clothing-chain operator said its back-to-school business was strong, its bottom line was affected by increased expenses as well as by “significant pressure” on its core customers.
The company reported third-quarter net income of $38.5 million, or $3.05 a share, down from $42.9 million, or $3.26 a share, in the year-ago quarter.
Adjusted profit of $3.22 a share fell short of the FactSet consensus estimate of $3.49 a share.
Third-quarter sales fell by 5.7% to $480.2 million, above the analyst estimate of $465.7 million.
Children’s Place said contributing factors were higher distribution and labor costs and pressured consumers.
Looking ahead, Children’s Place said it expects fourth-quarter sales of $460 million to $465 million, above the analyst estimate of $436.5 million, and adjusted profit of 25 cents to 45 cents a share, well below the analyst estimate of $1.39 a share.
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