SEGMENT INFORMATION

3 Months Ended

May 04, 2024

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

In 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 and www.gymboree.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 no customer that individually accounted for more than 10% of its net sales. As of May 4, 2024, The Children’s Place U.S. had 455 stores and The Children’s Place International had 63 stores. As of April 29, 2023, The Children’s Place U.S. had 528 stores and The Children’s Place International had 71 stores.

The following table provides segment level financial information:

	Thirteen Weeks Ended
	May 4, 2024		April 29, 2023
	(in thousands)
Net sales:
The Children’s Place U.S.	$	246,188	$	293,486
The Children’s Place International (1)	21,690		28,154
Total net sales	$	267,878	$	321,640
Operating loss:
The Children’s Place U.S.	$	(23,979)	$	(28,027)
The Children’s Place International	(4,009)		(2,040)
Total operating loss	$	(27,988)	$	(30,067)
Operating loss as a percentage of net sales:
The Children’s Place U.S.	(9.7%)		(9.5%)
The Children’s Place International	(18.5%)		(7.2%)
Total operating loss as a percentage of net sales	(10.4%)		(9.3%)
Depreciation and amortization:
The Children’s Place U.S.	$	9,654	$	10,905
The Children’s Place International	1,981		943
Total depreciation and amortization	$	11,635	$	11,848
Capital expenditures:
The Children’s Place U.S.	$	4,678	$	10,972
The Children’s Place International	16		10
Total capital expenditures	$	4,694	$	10,982

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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.