SEGMENT INFORMATION

6 Months Ended

Jul. 29, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATIONIn accordance with FASB ASC 280—Segment Reporting, the Company reports 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, www.gymboree.com, www.sugarandjade.com, and www.pjplace.com. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and revenue from the Company’s U.S.-based wholesale business. Included in The Children’s Place International segment are the Company’s Canadian-based stores, revenue from the Company’s Canadian-based wholesale business, and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income 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. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales, and the Company has one wholesale customer that individually accounted for more than 10% of its net sales for the Second Quarter 2023. As of July 29, 2023, The Children’s Place U.S. had 525 stores and The Children’s Place International had 71 stores. As of July 30, 2022, The Children’s Place U.S. had 577 stores and The Children’s Place International had 81 stores.

The following table provides segment level financial information:

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 29, 2023			July 30, 2022			July 29, 2023		July 30, 2022
	(in thousands)
Net sales:
The Children’s Place U.S.	$	313,217		$	341,223		$	606,703	$	669,184
The Children’s Place International (1)	32,382			39,662			60,536		74,051
Total net sales	$	345,599		$	380,885		$	667,239	$	743,235
Operating income (loss):
The Children’s Place U.S.	$	(36,739)		$	(13,943)		$	(64,766)	$	2,926
The Children’s Place International	(202)			114			(2,242)		2,499
Total operating income (loss)	$	(36,941)		$	(13,829)		$	(67,008)	$	5,425
Operating income (loss) as a percentage of net sales:
The Children’s Place U.S.	(11.7		%)	(4.1)		%	(10.7%)		0.4%
The Children’s Place International	(0.6		%)	0.3		%	(3.7%)		3.4%
Total operating income (loss) as a percentage of net sales	(10.7		%)	(3.6)		%	(10.0%)		0.7%
Depreciation and amortization:
The Children’s Place U.S.	$	11,079		$	12,261		$	21,984	$	24,848
The Children’s Place International	874			980			1,817		2,008
Total depreciation and amortization	$	11,953		$	13,241		$	23,801	$	26,856
Capital expenditures:
The Children’s Place U.S.	$	7,170		$	7,612		$	18,142	$	17,969
The Children’s Place International	—			431			10		797
Total capital expenditures	$	7,170		$	8,043		$	18,152	$	18,766

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(1)Net sales from The Children’s Place International are primarily derived from Canadian operations. 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.