: Children’s Place warns of a surprise, large loss due to slowing economy and high cotton and freight costs


Children’s Place Inc. warned Monday of a surprise large fiscal fourth-quarter loss, citing a an unexpected deterioration in gross margin due primarily to a “far more challenging” economic environment than previously anticipated. The children’s apparel retailer’s stock PLCE, -0.43% was still inactive in premarket trading. The company said it now expects adjusted per-share losses, which excludes nonrecurring items, of $4.02 to $4.41, compared with previous guidance for earnings per share of 50 cents to 75 cents, and with the FactSet consensus of 55 cents. Sales are expected to be $454 million to $456 million, compared with the FactSet consensus of $468 million. “The macro-economic environment in the fourth quarter proved to be far more challenging for our core customers than originally expected, resulting in lower sales than projected and the need for increased promotions as the Company worked to drive sales and reduce seasonal inventory levels,” the company said in a statement. On top of a weaker economy, the company said it experienced “decade-high cotton costs, higher costs from have to using airfreight due to supply chain delays and higher container costs. The stock has rallied 22.6% over the past three months while the S&P 500 SPX, -1.04% has advanced 9.7%.

This article was originally published by Marketwatch.com. Read the original article here.

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