The Children's Place has reported third-quarter revenue that beat analysts’ expectations, but an earnings miss sent its shares sharply lower on Thursday.
The children’s specialty retailer said sales over the three months to October 28, 2023, were fueled by a double-digit increase in e-commerce traffic, with strong back-to-school results in August and the success of its seasonal categories in September and October.
Profit was negatively affected by higher-than-planned distribution costs, including higher fulfilment and labor costs.
Revenue amounted to $480.2 million, above the $471.8 million expected by analysts.
Adjusted earnings per share were $3.22, below the $3.49 consensus estimate of analysts surveyed by Zacks Investment Research.
“While our core customer remains under significant pressure, we were pleased with our ability to drive top-line above our expectations throughout the third quarter,” president and CEO Jane Elfers said in a statement.
“Our top-line momentum from Q3 has accelerated into Q4 as our customer is responding to our trend-right assortments and our enhanced marketing tactics."
The company has guided for full-year net sales of $1.605 billion to $1.610 billion.
It expects to report a loss of between $0.39 and $0.59 per share.
Its shares fell 24.6% to $21.57 by 10am in New York.
Contact the author at stephen.gunnion@proactiveinvestors.com