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Aug 02
Children's Place Q2 2025 Earnings Report
Children’s Place reported a net loss in Q2 2025 but showed signs of recovery with positive comp sales in July.
Key Takeaways
The Children’s Place saw a decline in revenue and reported a net loss for Q2 2025, but improvements in back-to-school sales, inventory management, and transformation initiatives showed early signs of turnaround.
Revenue declined to $298 million, driven by lower traffic and store count.
Adjusted EPS was $(0.15), compared to $0.30 in Q2 2024.
Company achieved first positive comp sales month in over 18 months during July.
Inventory was reduced by $78 million year-over-year to improve free cash flow.
Children's Place
Children's Place
Forward Guidance
The company plans to invest in store openings, optimize costs, and strengthen wholesale partnerships despite macroeconomic headwinds and tariff uncertainty.
Positive Outlook
- First month of positive comp sales in July after 18 months of decline.
- Back-to-school sales momentum carried into August.
- Inventory reduced by $78 million year-over-year, improving cash flow.
- Transformation plan targeting $40 million in gross benefits over 3 years.
- Launch of new loyalty program in Q3 to boost customer retention.
Challenges Ahead
- Unfavorable macroeconomic environment continues to affect traffic.
- Additional $20–25 million in tariff and duty expenses projected for FY25.
- E-commerce and store traffic remain challenged year-over-year.
- Shift in channel mix continues to pressure gross margin.
- Transformation efforts will require $5–10 million in one-time costs.