By Elias Schisgall
The Children's Place reported a bigger loss and lower revenue in the fourth quarter as the company reported execution issues across its operations.
The children's apparel company on Friday said the decrease in sales was driven by lower traffic and conversion, which it attributed to challenges in execution and performance marketing strategies. Higher tariffs cut into the company's gross margin, and the reduction of shipments to Amazon, while planned, contributed to lower sales.
"While 2025 was a challenging year for most retailers-TCP is no exception-we are not pleased with the results, and we own it," Executive Chairman and controlling shareholder Turki AlRajhi said in a letter to shareholders. "This letter is intended for long-term shareholders who have a serious interest in their holdings, as distinguished from speculators. Had our positions been reversed, this Honest-to-God letter would have been what I wanted."
Shares tumbled 20% to $3.19 in after-hours trading. The stock closed up 10% at $3.97 and is roughly flat this year.
The company reported a fourth-quarter loss of $44.6 million, or $2.01 a share, compared with a loss of $8 million, or 62 cents a share, a year earlier.
Stripping out certain one-time items, the company logged an adjusted net loss of $1.86 a share.
Revenue fell to $329.2 million from $408.6 million.
AlRajhi said the company is looking to optimize costs through supply chain and warehousing consolidations, renegotiating contracts, optimizing payroll, and offshoring roles.
The Children's Place now expects $60 million in gross savings in fiscal year 2027, with one-time and ongoing costs in a range of about $10 million to $15 million, he said.
The company has also looked to rebalance its product mix, expand categories, and adapt better to trends and demands for value, AlRajhi said. The company began using Salesforce in February, which Chief Executive Officer Muhammad Umair said is expected to stabilize customer files and drive traffic.
Write to Elias Schisgall at elias.schisgall@wsj.com
(END) Dow Jones Newswires
April 10, 2026 17:25 ET (21:25 GMT)
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