チルドレンズプレイスの四半期報告

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 2, 2025


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 0-23071

THE CHILDREN’S PLACE, INC.

(Exact name of registrant as specified in its charter)


Delaware						31-1241495
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

500 Plaza Drive
Secaucus, New Jersey						07094
(Address of principal executive offices)						(Zip Code)

(201) 558-2400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value	PLCE	Nasdaq Global Select Market

___________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, par value $0.10 per share, outstanding at September 2, 2025: 22,167,889.

Table of Contents

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED AUGUST 2, 2025

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION		PAGE

Item 1.	F inancial S tatements.
	Consolidated Balance Sheets as of August 2, 2025, February 1, 2025 and August 3, 2024	1
	Consolidated Statements of Operations for the thirteen weeks and twenty-six weeks ended August 2, 2025 and August 3, 2024	2
	Consolidated Statements of Comprehensive Loss for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024	3
	Consolidated Statements of Changes in Stockholders’ Deficit for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024	4
	Consolidated Statements of Cash Flows for the twenty-six weeks ended August 2, 2025 and August 3, 2024	6
	Notes to C onsolidated F inancial S tatements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	24
Item 3.	Quantitative and Qualitative Disclosures A bout Market Risk.	36
Item 4.	Controls and Procedures.	38

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings.	39
Item 1A.	Risk Factors.	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	39
Item 5.	Other Information.	39
Item 6.	Exhibits.	40

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	August 2, 2025		February 1, 2025		August 3, 2024

	(in thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	7,798	$	5,347	$	9,573

Accounts receivable	54,365		42,701		61,926
Inventories	442,705		399,602		520,593
Prepaid expenses and other current assets	38,987		20,354		35,251

Total current assets	543,855		468,004		627,343
Long-term assets:
Property and equipment, net	89,445		97,487		111,296
Right-of-use assets	151,145		161,595		163,539
Tradenames, net	13,000		13,000		13,000

Other assets	7,652		7,466		6,236
Total assets	$	805,097	$	747,552	$	921,414

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Revolving loan	$	294,417	$	245,659	$	316,655

Accounts payable	132,436		126,716		215,793
Current portion of operating lease liabilities	60,546		67,407		67,610
Income taxes payable	2,043		2,441		3,384
Accrued expenses and other current liabilities	94,454		75,895		95,074
Total current liabilities	583,896		518,118		698,516
Long-term liabilities:


Related party long-term debt	107,193		165,974		165,354
Long-term portion of operating lease liabilities	103,982		107,287		110,596

Other tax liabilities	5,523		5,291		5,073
Other long-term liabilities	9,370		10,293		10,747
Total liabilities	809,964		806,963		990,286
Commitments and contingencies (see Note 7)
Stockholders’ deficit:
Preferred stock, $1.00 par value, 1,000 shares authorized, 0 shares issued and outstanding	—		—		—
Common stock, $0.10 par value, 100,000 shares authorized; 22,171, 12,785, and 12,779 issued; 22,168, 12,782, and 12,718 outstanding	2,217		1,279		1,278
Additional paid-in capital	242,407		151,485		151,859
Treasury stock, at cost (3, 3, and 61 shares)	(90)		(90)		(2,975)
Deferred compensation	90		90		2,975
Accumulated other comprehensive loss	(17,419)		(19,491)		(17,235)
Accumulated deficit	(232,072)		(192,684)		(204,774)
Total stockholders’ deficit	(4,867)		(59,411)		(68,872)
Total liabilities and stockholders’ deficit	$	805,097	$	747,552	$	921,414

See accompanying notes to these consolidated financial statements.

Table of Contents

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands, except loss per common share)
Net sales	$	298,006	$	319,655	$	540,131	$	587,533
Cost of sales (exclusive of depreciation and amortization)	196,734		207,861		368,076		382,998
Gross profit	101,272		111,794		172,055		204,535
Selling, general, and administrative expenses	89,596		96,065		176,266		205,159
Depreciation and amortization	7,570		9,505		15,800		21,140
Asset impairment charges	—		28,000		—		28,000
Operating income (loss)	4,106		(21,776)		(20,011)		(49,764)
Related party interest expense	(1,868)		(2,087)		(3,740)		(2,476)
Other interest expense	(6,167)		(7,158)		(12,867)		(14,501)
Interest income	17		14		27		25
Loss before provision for income taxes	(3,912)		(31,007)		(36,591)		(66,716)
Provision for income taxes	1,453		1,107		2,797		3,193
Net loss	$	(5,365)	$	(32,114)	$	(39,388)	$	(69,909)

Loss per common share
Basic	$	(0.24)	$	(2.51)	$	(1.80)	$	(5.49)
Diluted	$	(0.24)	$	(2.51)	$	(1.80)	$	(5.49)

Weighted average common shares outstanding
Basic	22,142		12,793		21,885		12,729
Diluted	22,142		12,793		21,885		12,729

See accompanying notes to these consolidated financial statements.

Table of Contents

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands)
Net loss	$	(5,365)	$	(32,114)	$	(39,388)	$	(69,909)
Other comprehensive income (loss):
Foreign currency translation adjustment	(1,510)		(413)		2,072		(739)
Total comprehensive loss	$	(6,875)	$	(32,527)	$	(37,316)	$	(70,648)

See accompanying notes to these consolidated financial statements.

Table of Contents

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)


Thirteen Weeks Ended August 2, 2025
										Accumulated					Total
				Additional						Other					Stockholders’
	Common Stock			Paid-In		Deferred		Accumulated		Comprehensive		Treasury Stock			Equity
(in thousands)	Shares	Amount		Capital		Compensation		Deficit		Loss		Shares	Amount		(Deficit)











































Balance, May 3, 2025	22,065	$	2,207	$	241,824	$	90	$	(226,707)	$	(15,909)	(3)	$	(90)	$	1,415
Vesting of stock awards	162	16		(16)		—		—		—		—	—		—
Stock-based compensation expense	—	—		931		—		—		—		—	—		931
Purchase and retirement of common stock	(56)	(6)		(332)		—		—		—		—	—		(338)


Other comprehensive loss	—	—		—		—		—		(1,510)		—	—		(1,510)

Net loss	—	—		—		—		(5,365)		—		—	—		(5,365)
Balance, August 2, 2025	22,171	$	2,217	$	242,407	$	90	$	(232,072)	$	(17,419)	(3)	$	(90)	$	(4,867)



Twenty-six Weeks Ended August 2, 2025
										Accumulated
				Additional						Other					Total
	Common Stock			Paid-In		Deferred		Accumulated		Comprehensive		Treasury Stock			Stockholders’
(in thousands)	Shares	Amount		Capital		Compensation		Deficit		Loss		Shares	Amount		Deficit
Balance, February 1, 2025	12,785	$	1,279	$	151,485	$	90	$	(192,684)	$	(19,491)	(3)	$	(90)	$	(59,411)


Vesting of stock awards	226	22		(22)		—		—		—		—	—		—
Stock-based compensation expense	—	—		2,677		—		—		—		—	—		2,677
Purchase and retirement of common stock	(71)	(7)		(415)		—		—		—		—	—		(422)
Rights offering stock issuance	9,231	923		89,077		—		—		—		—	—		90,000
Stock issuance costs	—	—		(395)		—		—		—		—	—		(395)
Other comprehensive income	—	—		—		—		—		2,072		—	—		2,072





Net loss	—	—		—		—		(39,388)		—		—	—		(39,388)
Balance, August 2, 2025	22,171	$	2,217	$	242,407	$	90	$	(232,072)	$	(17,419)	(3)	$	(90)	$	(4,867)

See accompanying notes to these consolidated financial statements.

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THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)


Thirteen Weeks Ended August 3, 2024
										Accumulated
				Additional						Other					Total
	Common Stock			Paid-In		Deferred		Accumulated		Comprehensive		Treasury Stock			Stockholders’
(in thousands)	Shares	Amount		Capital		Compensation		Deficit		Loss		Shares	Amount		Deficit











































Balance, May 4, 2024	12,739	$	1,274	$	153,358	$	2,957	$	(172,660)	$	(16,822)	(60)	$	(2,957)	$	(34,850)


Vesting of stock awards	61	6		(6)		—		—		—		—	—		—

Stock-based compensation benefit	—	—		(1,248)		—		—		—		—	—		(1,248)

Purchase and retirement of common stock	(21)	(2)		(245)		—		—		—		—	—		(247)

Other comprehensive loss	—	—		—		—		—		(413)		—	—		(413)


Deferral of common stock into deferred compensation plan	—	—		—		18		—		—		(1)	(18)		—
Net loss	—	—		—		—		(32,114)		—		—	—		(32,114)
Balance, August 3, 2024	12,779	$	1,278	$	151,859	$	2,975	$	(204,774)	$	(17,235)	(61)	$	(2,975)	$	(68,872)



Twenty-six Weeks Ended August 3, 2024
										Accumulated
				Additional						Other					Total
	Common Stock			Paid-In		Deferred		Accumulated		Comprehensive		Treasury Stock			Stockholders’
(in thousands)	Shares	Amount		Capital		Compensation		Deficit		Loss		Shares	Amount		Deficit
Balance, February 3, 2024	12,585	$	1,259	$	141,083	$	2,909	$	(134,865)	$	(16,496)	(56)	$	(2,909)	$	(9,019)


Vesting of stock awards	265	26		(26)		—		—		—		—	—		—

Stock-based compensation expense	—	—		11,361		—		—		—		—	—		11,361
Purchase and retirement of common stock	(71)	(7)		(559)		—		—		—		—	—		(566)




Other comprehensive loss	—	—		—		—		—		(739)		—	—		(739)

Deferral of common stock into deferred compensation plan	—	—		—		66		—		—		(5)	(66)		—
Net loss	—	—		—		—		(69,909)		—		—	—		(69,909)
Balance, August 3, 2024	12,779	$	1,278	$	151,859	$	2,975	$	(204,774)	$	(17,235)	(61)	$	(2,975)	$	(68,872)

See accompanying notes to these consolidated financial statements.

Table of Contents

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(39,388)	$	(69,909)


Reconciliation of net loss to net cash used in operating activities:
Non-cash portion of operating lease expense	35,571		39,184
Depreciation and amortization	15,800		21,140

Non-cash stock-based compensation expense	2,677		11,361
Asset impairment charges	—		28,000
Other non-cash charges, net	2,647		1,072
Loss on extinguishment of debt	1,039		—
Changes in operating assets and liabilities:
Inventories	(41,914)		(159,211)
Accounts receivable and other assets	(12,878)		(27,831)
Prepaid expenses and other current assets	(8,720)		(5,050)
Income taxes payable, net of prepayments	(8,303)		4,016
Accounts payable and other current liabilities	16,247		(861)
Lease liabilities	(35,307)		(36,461)
Other long-term liabilities	(907)		(137)

Net cash used in operating activities	(73,436)		(194,687)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(4,843)		(12,478)



Net cash used in investing activities	(4,843)		(12,478)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility	365,258		618,891
Repayments under revolving credit facility	(316,500)		(528,951)
Proceeds from rights offering	90,000		—
Purchase and retirement of common stock, including shares surrendered for tax withholdings and transaction costs	(422)		(566)
Proceeds from issuance of related party term loans	—		168,600
Repayment of related party term loan	(60,187)		—
Repayment of term loan	—		(50,000)
Payment of debt issuance costs	—		(4,322)
Payment of stock issuance costs	(395)		—
Net cash provided by financing activities	77,754		203,652
Effect of exchange rate changes on cash and cash equivalents	2,976		(553)
Net increase (decrease) in cash and cash equivalents	2,451		(4,066)
Cash and cash equivalents, beginning of period	5,347		13,639
Cash and cash equivalents, end of period	$	7,798	$	9,573
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Net cash paid (received) for income taxes	$	11,140	$	(527)
Cash paid for interest	13,774		13,184
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Purchases of property and equipment not yet paid	6,432		2,144

See accompanying notes to these consolidated financial statements.

Table of Contents

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.BASIS OF PRESENTATION

Description of Business

The Children’s Place, Inc. and its subsidiaries (collectively, the “Company”) is the largest pure-play children’s specialty retailer in North America with an omni-channel portfolio of brands and an industry-leading digital-first model. The Company designs, contracts to manufacture, and sells fashionable, high-quality apparel, accessories and footwear predominantly at value prices, primarily under the Company’s proprietary brands “The Children’s Place”, “Gymboree”, “Sugar & Jade”, and “PJ Place”. Its global retail and wholesale network includes two digital storefronts, 494 stores in North America, wholesale marketplaces, 229 international points of distribution in 12 countries through seven international franchise and wholesale partners and social media channels on Instagram, Facebook, X, formerly known as Twitter, YouTube and Pinterest. The Company’s digital storefronts are at www.childrensplace.com and www.gymboree.com, where its customers are able to shop online for the same merchandise available in its physical stores, but also certain exclusive merchandise only available at its e-commerce sites.

The Company classifies its business into two segments: The Children’s Place U.S. and The Children’s Place International. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and net sales from its U.S.-based wholesale business. Included in The Children’s Place International segment are its Canadian-based stores and net sales from international franchisees. Each segment includes an e-commerce business located at www.childrensplace.com and www.gymboree.com.

Terms that are commonly used in the notes to the Company’s consolidated financial statements are defined as follows:

•Second Quarter 2025 — The thirteen weeks ended August 2, 2025

•Second Quarter 2024 — The thirteen weeks ended August 3, 2024

•Year-To-Date 2025 — The twenty-six weeks ended August 2, 2025

•Year-To-Date 2024 — The twenty-six weeks ended August 3, 2024

•Fiscal 2025 — The fifty-two weeks ending January 31, 2026

•Fiscal 2024 — The fifty-two weeks ended February 1, 2025

•SEC — U.S. Securities and Exchange Commission

•U.S. GAAP — Generally Accepted Accounting Principles in the United States

•FASB — Financial Accounting Standards Board

•FASB ASC — FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants

Basis of Presentation

The unaudited consolidated financial statements and accompanying notes to the consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. As of August 2, 2025, February 1, 2025 and August 3, 2024, the Company did not have any investments in unconsolidated affiliates. FASB ASC 810—Consolidation is considered when determining whether an entity is subject to consolidation.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the consolidated balance sheets of the Company as of August 2, 2025 and August 3, 2024, the results of its consolidated operations, consolidated comprehensive loss, and consolidated changes in stockholders’ deficit for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024, and consolidated cash flows for the twenty-six weeks ended August 2, 2025 and August 3, 2024. The consolidated balance sheet as of February 1, 2025 was derived from audited financial statements. Due to the seasonal nature of the Company’s business, the results of operations for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024 are not necessarily indicative of operating results for a full fiscal year. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

Fiscal Year

The Company’s fiscal year is a fifty-two week or fifty-three week period ending on the Saturday on or nearest to January 31.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses reported during the period. Actual results could differ from the assumptions used and estimates made by management, which could have a material impact on the Company’s financial position or results of operations. Critical accounting estimates inherent in the preparation of the consolidated financial statements include impairment of long-lived assets, impairment of indefinite-lived intangible assets, income taxes, stock-based compensation, and inventory valuation.

Recent Accounting Standards Updates

Accounting Pronouncement Recently Adopted

In November 2023, the FASB issued Accounting Standards Update No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” (“ASU 2023-07”). The amendments in ASU 2023-07 are designed to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses during interim and annual periods. The Company adopted ASU 2023-07 on a retrospective basis and is effective for the Company’s Annual Report on Form 10-K for Fiscal 2024, and subsequent interim periods. The adoption of ASU 2023-07 expanded our disclosures but did not have a material impact on our consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU 2023-09”). The amendments in ASU 2023-09 are designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of ASU 2023-09 will expand the Company’s disclosures, but is not expected to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03 “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40),” (“ASU 2024-03”). The amendments in ASU 2024-03 are designed to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

2. REVENUES

The following table presents the Company’s net sales disaggregated by geography:


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands)
South	$	116,383	$	125,639	$	202,040	$	228,895
Northeast	47,156		50,453		93,010		104,680
West	34,954		38,837		62,695		72,753
Midwest	25,905		27,953		51,825		60,491
International and other (1)	73,608		76,773		130,561		120,714
Total net sales	$	298,006	$	319,655	$	540,131	$	587,533

____________________________________________

(1)Includes retail and e-commerce sales in Canada and Puerto Rico, wholesale and franchisee sales, and certain amounts earned under the Company’s private label credit card program.

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The Company recognizes revenue, including shipping and handling fees billed to customers, as applicable, upon purchase at the Company’s retail stores or when received by the customer if the product was purchased via e-commerce, net of coupon redemptions and anticipated sales returns. The Company deferred sales of $10.6 million, $3.2 million, and $12.6 million within Accrued expenses and other current liabilities as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively, based upon estimated time of delivery, at which point control passes to the customer. Sales tax collected from customers is excluded from revenue.

For its wholesale business, the Company recognizes revenue, when title of the goods passes to the customer, net of commissions, discounts, operational chargebacks, and cooperative advertising. The allowance for wholesale revenue included within Accounts receivable was $6.9 million, $8.7 million, and $8.0 million as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively.

For the sale of goods to retail customers with a right of return, the Company recognizes revenue for the consideration it expects to be entitled to and calculates an allowance for estimated sales returns based upon the Company’s sales return experience. Adjustments to the allowance for estimated sales returns in subsequent periods have not been material based on historical data, thereby reducing the uncertainty inherent in such estimates. The allowance for estimated sales returns, which is recorded in Accrued expenses and other current liabilities, was $2.0 million, $1.0 million, and $2.1 million as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively.

The Company’s private label credit card is issued to customers for use exclusively at The Children’s Place and Gymboree stores in the U.S. and online at www.childrensplace.com and www.gymboree.com, and credit is extended to such customers by a third-party financial institution on a non-recourse basis to the Company. The private label credit card includes multiple performance obligations for the Company, including marketing and promoting the program on behalf of the bank and the operation of the loyalty rewards program. Included in the agreement with the third-party financial institution was an upfront bonus paid to the Company and an additional bonus to extend the term of the agreement. These bonuses are recognized as revenue and allocated between brand and reward obligations. As the license of the Company’s brand is the predominant item in the performance obligation, the amount allocated to the brand obligation is recognized on a straight-line basis over the term of the agreement. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

In measuring revenue and determining the consideration the Company is entitled to as part of a contract with a customer, the Company takes into account the related elements of variable consideration, such as additional bonuses, including profit-sharing, over the life of the private label credit card program. Similar to the upfront bonus, the usage-based royalties and bonuses are recognized as revenue and allocated between the brand and reward obligations. The amount allocated to the brand obligation is recognized on a straight-line basis over the remaining term. The amount allocated to the reward obligation is recognized on a point-in-time basis as redemptions under the loyalty program occur. In addition, the annual profit-sharing amount is recognized quarterly within an annual period when it can be estimated reliably. The additional bonuses are amortized over the contract term based on anticipated progress against future targets and level of risk associated with achieving the targets.

The Company has a points-based customer loyalty program in which customers earn points based on purchases and other promotional activities. These points can be redeemed for coupons to discount future purchases. The redemption cycle for coupons is 45 days. A contract liability is estimated based on the standalone selling price of benefits earned by customers through the program and the related redemption experience under the program. The value of each point earned is recorded as deferred revenue and is included within Accrued expenses and other current liabilities. The total contract liabilities related to this program were $6.0 million, $3.7 million, and $3.6 million as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively. During Year-To-Date 2025 and Year-To-Date 2024, the Company recognized Net sales of $3.7 million and $1.7 million related to the points-based customer loyalty program balance that existed at February 1, 2025 and February 3, 2024, respectively.

The Company’s policy with respect to gift cards is to record revenue as and when the gift cards are redeemed for merchandise. The Company recognizes gift card breakage income in proportion to the pattern of rights exercised by the customer when the Company expects to be entitled to breakage and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recorded within Net sales. Prior to their redemption, gift cards are recorded as a liability within Accrued expenses and other current liabilities. The liability is estimated based on expected breakage that considers historical patterns of redemption. The gift card liability balance as of August 2, 2025, February 1, 2025, and August 3, 2024 was $4.3 million, $4.8 million, and $6.4 million, respectively. During the Second Quarter 2025 and the Second Quarter 2024, the Company recognized Net sales of $0.9 million and $1.0 million related to the gift card liability balance that existed at February 1, 2025 and February 3, 2024, respectively. During Year-To-Date 2025 and Year-To-Date 2024, the Company recognized Net sales of $2.3 million and $2.7 million related to the gift card liability balance that existed at February 1, 2025 and February 3, 2024, respectively.

The Company has an international program of territorial agreements with franchisees. The Company generates revenues from the franchisees from the sale of product and, in certain cases, sales royalties. The Company recognizes revenue on the sale of product to franchisees when the franchisee takes ownership of the product. The Company records net sales for royalties when the applicable franchisee sells the product to its customers. Under certain agreements, the Company receives a fee from each franchisee for exclusive territorial rights and based on the opening of new stores. The Company records these territorial fees as deferred revenue and amortizes the fee into Net sales over the life of the territorial agreement.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

3. INTANGIBLE ASSETS

On April 4, 2019, the Company acquired certain intellectual property and related assets of Gymboree Group, Inc. and related entities, which included the worldwide rights to the Gymboree tradename. The Gymboree tradename is recorded in the long-term assets section of the consolidated balance sheets.

The Company’s intangible assets were as follows:


		August 2, 2025
	Useful Life	Gross Amount		Accumulated Amortization		Net Amount
		(in thousands)
Gymboree tradename	Indefinite	$	13,000	$	—	$	13,000

Total intangible assets		$	13,000	$	—	$	13,000


		February 1, 2025
	Useful Life	Gross Amount		Accumulated Amortization		Net Amount
		(in thousands)
Gymboree tradename	Indefinite	$	13,000	$	—	$	13,000
Crazy 8 tradename	5 years	4,000		(4,000)		—
Total intangible assets		$	17,000	$	(4,000)	$	13,000


		August 3, 2024
	Useful Life	Gross Amount		Accumulated Amortization		Net Amount
		(in thousands)
Gymboree tradename	Indefinite	$	13,000	$	—	$	13,000

Total intangible assets		$	13,000	$	—	$	13,000

The Company did not identify any indicators of impairment in the Second Quarter 2025 and Year-To-Date 2025. The Company recorded an impairment charge on the Gymboree tradename of $28.0 million during the Second Quarter 2024, which reduced the carrying value to its fair value of $13.0 million as of August 3, 2024.

4. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:


	August 2, 2025		February 1, 2025		August 3, 2024
	(in thousands)
Land and land improvements	$	3,403	$	3,403	$	3,403
Building and improvements	36,209		36,527		36,309
Material handling equipment	84,761		88,092		89,427
Leasehold improvements	162,599		159,992		164,054
Store fixtures and equipment	151,551		151,810		164,795
Capitalized software	229,404		228,227		335,762
Construction in progress	4,850		1,647		5,992
	672,777		669,698		799,742
Less: accumulated depreciation and amortization	(583,332)		(572,211)		(688,446)
Property and equipment, net	$	89,445	$	97,487	$	111,296

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The Company reviewed its store related long-lived assets for indicators of impairment, and performed a recoverability test if indicators were identified. Based on the results of the analyses performed, the Company did not record asset impairment charges in the Second Quarter 2025 and Year-To-Date 2025, and in the Second Quarter 2024 and Year-To-Date 2024.

5. LEASES

The Company has operating leases for retail stores, corporate offices, distribution facilities, and certain equipment. The Company’s leases have remaining lease terms ranging from less than one year up to twelve years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the lease early. The Company records all occupancy costs in Cost of sales, except costs for administrative office buildings, which are recorded in Selling, general, and administrative expenses. As of the periods presented, the Company’s finance leases were not material to the Consolidated Balance Sheets, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows.

The following components of operating lease expense were recognized in the Company’s Consolidated Statements of Operations:


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands)
Fixed operating lease cost	$	21,343	$	23,139	$	42,542	$	45,641
Variable operating lease cost	4,322		6,098		10,081		13,944
Total operating lease cost	$	25,665	$	29,237	$	52,623	$	59,585

The following table provides the weighted-average remaining lease term of the Company’s operating leases, the weighted-average discount rate used to calculate the Company’s operating liabilities, cash paid for amounts included in the measurement of the Company’s operating lease liabilities, and right-of-use (“ROU”) assets obtained in exchange for the Company’s new operating lease liabilities:


	Twenty-six Weeks Ended
	August 2, 2025	August 3, 2024
Weighted-average remaining lease term (years)	4.4	4.3
Weighted average discount rate (%)	8.6%	7.8%
Cash paid for amounts included in the measurement of operating lease liabilities ($, in millions)	35.7	39.8
ROU assets obtained in exchange for new operating lease liabilities ($, in millions)	27.3	34.8

The maturities of operating lease liabilities were as follows:


	August 2, 2025
	(in thousands)
Remainder of 2025	$	42,870
2026	56,592
2027	29,880
2028	20,172
2029	13,968
Thereafter	39,507
Total operating lease payments	202,989
Less: imputed interest	(38,461)
Present value of operating lease liabilities	$	164,528

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

6. DEBT

ABL Credit Facility

The Company and certain subsidiaries maintain the $433.0 million asset-based revolving credit facility (the “ABL Credit Facility”) under its Amended and Restated Credit Agreement dated May 9, 2019 (as amended from time to time, the “Credit Agreement”), with Wells Fargo Bank, National Association (“Wells Fargo”), Bank of America, N.A., JPMorgan Chase Bank, N.A., Truist Bank, HSBC Bank (USA), N.A., and PNC Bank, National Association, as the lenders party thereto and Wells Fargo, as Administrative Agent, Collateral Agent, and Swing Line Lender. The ABL Credit Facility will mature in November 2026.

As of April 18, 2024, which is the effective date of the seventh amendment to the Credit Agreement (the “Seventh Amendment”), the ABL Credit Facility includes a $25.0 million Canadian sublimit and a $25.0 million sublimit for standby and documentary letters of credit.

From and after February 4, 2025 and on the first day of each fiscal quarter thereafter, based on the amount of the Company’s average daily excess availability under the facility, borrowings outstanding under the ABL Credit Facility bear interest, at the Company’s option, at:

(i)the prime rate per annum, plus a margin of 1.750% or 2.000%; or

(ii)the Secured Overnight Financing Rate (“SOFR”) per annum, plus 0.100%, plus a margin of 2.750% or 3.000%.

As of April 18, 2024, based on the size of the unused portion of the commitments, the Company is charged a fee ranging from 0.250% to 0.375%.

As of February 4, 2025, letter of credit fees range from 1.000% to 1.125% for commercial letters of credit and range from 1.500% to 1.750% for standby letters of credit. These fees are determined based on the amount of the Company’s average daily excess availability under the facility. The amount available for loans and letters of credit under the ABL Credit Facility is determined by a borrowing base consisting of certain credit card receivables, certain trade receivables, certain inventory, and the fair market value of certain real estate, subject to certain reserves and an availability block.

For the Second Quarter 2025 and Year-To-Date 2025, the Company recognized $5.4 million and $10.2 million, respectively, in interest expense related to the ABL Credit Facility. For the Second Quarter 2024 and Year-To-Date 2024, the Company recognized $6.3 million and $12.0 million, respectively, in interest expense related to the ABL Credit Facility.

As of April 18, 2024, credit extended under the ABL Credit Facility is secured by a first priority security interest in substantially all of the Company’s U.S. and Canadian assets, including the Company’s intellectual property, certain furniture, fixtures, equipment, and pledges of subsidiary capital stock.

The outstanding obligations under the ABL Credit Facility may be accelerated upon the occurrence of certain customary events of default, as described below. The Company is not subject to any early termination fees.

The ABL Credit Facility contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments. These covenants also limit the ability of the Company and its subsidiaries to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, or dispositions or to change the nature of its business. Pursuant to the Seventh Amendment, the requisite payment condition thresholds for some of these covenants have been heightened, resulting in certain actions such as the repurchase of shares and payment of cash dividends becoming more difficult to perform. Additionally, if the Company is unable to maintain a certain amount of excess availability for borrowings (the “excess availability threshold”), the Company may be subject to cash dominion.

The ABL Credit Facility contains customary events of default, which include (subject in certain cases to customary grace and cure periods) nonpayment of principal or interest, breach of covenants, failure to pay certain other indebtedness, and certain events of bankruptcy, insolvency or reorganization, such as a change of control.

As of August 2, 2025, February 1, 2025, and August 3, 2024, unamortized deferred financing costs amounted to $2.7 million, $3.8 million, and $2.4 million, related to the Company’s ABL Credit Facility.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The tables below present the components of the Company’s ABL Credit Facility:


	August 2, 2025		February 1, 2025		August 3, 2024
	(in millions)
Total borrowing base availability	$	356.4	$	301.9	$	396.2
Credit facility availability	433.0		433.0		433.0
Maximum borrowing availability (1)	356.4		301.9		396.2

Outstanding borrowings	294.4		245.7		316.7

Letters of credit outstanding—standby	18.2		16.0		12.2
Utilization of credit facility at end of period	312.6		261.7		328.9

Availability (2)	$	43.8	$	40.2	$	67.3

Interest rate at end of period	7.6%		7.6%		8.6%


Average end-of-day loan balance during the period	$	261.7	$	284.5	$	252.7
Highest end-of-day loan balance during the period	$	302.3	$	366.9	$	328.0

Average interest rate	7.7%		8.7%		9.3%

____________________________________________

(1)The lower of the credit facility availability and the total borrowing base availability.

(2)The sub-limit availability for letters of credit was $6.8 million as of August 2, 2025, $9.0 million at February 1, 2025, and $12.8 million as of August 3, 2024.

Mithaq Term Loans

Mithaq Capital SPC, a Cayman segregated portfolio company (“Mithaq”), is a controlling stockholder of the Company. The Company and certain subsidiaries maintain an interest-free, unsecured and subordinated promissory note with Mithaq for a $78.6 million term loan (the “Initial Mithaq Term Loan”), dated February 29, 2024, by and among the Company, certain of its subsidiaries, and Mithaq. During the first quarter of Fiscal 2025, $60.2 million under the Initial Mithaq Term Loan was repaid pursuant to the completion of the Company’s rights offering on February 6, 2025 (“Rights Offering”), leaving $18.4 million outstanding under the Initial Mithaq Term Loan as of August 2, 2025. For more information about the Rights Offering, see “Note 8. Stockholders’ Deficit” below.

The Initial Mithaq Term Loan matures on February 15, 2027 and is guaranteed by each of the Company’s subsidiaries that guarantee the Company’s ABL Credit Facility.

The Company and certain subsidiaries also maintain an unsecured and subordinated promissory note with Mithaq for a $90.0 million term loan (the “New Mithaq Term Loan”; and together with the Initial Mithaq Term Loan, collectively, the “Mithaq Term Loans”), dated April 16, 2024, by and among the Company, certain of its subsidiaries, and Mithaq.

The New Mithaq Term Loan matures on April 16, 2027, and requires monthly payments equivalent to interest charged at the SOFR plus 4.000% per annum, with the first year’s monthly payments to Mithaq deferred until April 30, 2025. On April 28, 2025, the Company and Mithaq entered into Amendment No. 1 to the New Mithaq Term Loan promissory note, which subjected these deferred monthly payments due as of April 30, 2025 to a payment plan, payable in installments prior to the end of Fiscal 2025. The amendment was evaluated under FASB ASC 470 — Debt, and accounted for as a debt modification. The New Mithaq Term Loan is guaranteed by each of the Company’s subsidiaries that guarantee the Company’s ABL Credit Facility. For the Second Quarter 2025 and Year-To-Date 2025, the Company recognized $1.9 million and $3.7 million, respectively, in interest-equivalent expense related to the New Mithaq Term Loan. For the Second Quarter 2024 and Year-To-Date 2024, the Company recognized $2.1 million and $2.5 million, respectively, in interest-equivalent expense related to the New Mithaq Term Loan.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

During the Second Quarter 2025, the Company paid $3.3 million in interest-equivalent charges to Mithaq. These payments were made in the form of Murabaha transactions to be compliant with Shariah law. The purchase and sale of commodities as a result of these transactions have been accounted for in accordance with FASB ASC 610 — Other income, and presented on a net basis within Related party interest expense. As of August 2, 2025, February 1, 2025, and August 3, 2024, interest-equivalent expense payable to Mithaq was $7.0 million, $6.5 million, and $2.5 million, respectively, which is recorded within Accrued expenses and other current liabilities.

The Mithaq Term Loans are subject to an amended and restated subordination agreement (as amended from time to time, the “Subordination Agreement”), dated as of April 16, 2024, by and among the Company and certain subsidiaries, Wells Fargo and Mithaq, pursuant to which the Mithaq Term Loans are subordinated in payment priority to the obligations of the Company and its subsidiaries under the Credit Agreement. Subject to such subordination terms, the Mithaq Term Loans are prepayable at any time and from time to time without penalty and do not require any mandatory prepayments.

The Mithaq Term Loans contain customary affirmative and negative covenants substantially similar to a subset of the covenants set forth in the Credit Agreement, including limits on the ability of the Company and its subsidiaries to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, dispositions or restricted payments, or to change the nature of its business. The Mithaq Term Loans, however, do not provide for any closing, prepayment or exit fees, or other fees typical for transactions of this nature, do not impose additional reserves on borrowings under the Credit Agreement, and do not contain certain other restrictive covenants.

The Mithaq Term Loans contain certain customary events of default, which include (subject in certain cases to customary grace periods), nonpayment of principal, breach of other covenants of the Mithaq Term Loans, inaccuracy in representations or warranties, acceleration of certain other indebtedness (including under the Credit Agreement), certain events of bankruptcy, insolvency or reorganization, such as a change of control, and invalidity of any part of the Mithaq Term Loans.

As of August 2, 2025, February 1, 2025, and August 3, 2024, unamortized deferred financing costs amounted to $1.2 million, $2.6 million, and $3.2 million, respectively, related to the Mithaq Term Loans.

Maturities of the Company’s principal debt payments on the Mithaq Term Loans as of August 2, 2025 are as follows:


	August 2, 2025
	(in thousands)
Remainder of 2025	$	—
2026	—
2027	108,400

Thereafter	—
Total related party debt	$	108,400

Mithaq Commitment Letter

On May 2, 2024, the Company entered into a commitment letter (the “Commitment Letter”) with Mithaq for a senior unsecured $40.0 million credit facility (the “Mithaq Credit Facility”). Under the Mithaq Credit Facility, the Company had the ability to request for advances at any time prior to July 1, 2025. On September 10, 2024, the Company and Mithaq entered into an Amendment No. 1 to the Commitment Letter, that extended the deadline for requesting advances until July 1, 2026. On September 4, 2025, the Company and Mithaq entered into an Amendment No. 2 to the Commitment Letter, that further extended the deadline for requesting advances until July 1, 2027.

If any debt is incurred under the Mithaq Credit Facility, it shall require monthly payments equivalent to interest charged at the SOFR plus 5.000% per annum. Such debt shall be unsecured and shall be guaranteed by each of the Company’s subsidiaries that guarantee the Company’s ABL Credit Facility. Similar to the Mithaq Term Loans, such debt shall also be subject to the Subordination Agreement, contain customary affirmative and negative covenants substantially similar to a subset of the covenants set forth in the Credit Agreement, and contain certain customary events of default. Additionally, such debt shall require no mandatory prepayments and shall mature no earlier than July 1, 2027. As of August 2, 2025, no debt had been incurred under the Mithaq Credit Facility.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. COMMITMENTS AND CONTINGENCIES

The Company is a defendant in Gabriela Gonzalez v. The Children’s Place, Inc., a purported class action, pending in the U.S. District Court, Central District of California. The plaintiff alleged that the Company had falsely advertised discounts that do not exist, in violation of California’s Unfair Competition Laws, False Advertising Law and the California Consumer Legal Remedies Act. The Company filed a motion to compel arbitration, which the plaintiff did not oppose, and the court granted the motion on August 17, 2022—staying the case pending the outcome of the arbitration. The demand for arbitration was filed on October 4, 2022, in connection with the individual claim of the plaintiff. A mass arbitration firm associated with plaintiff’s counsel then conducted an advertising campaign for claimants to conduct a mass arbitration. In part, to avoid the mass arbitration, the parties stipulated to return the original plaintiff’s claim to court to proceed as a class action. Accordingly, the arbitration would not be proceeding and the Company’s response to the original plaintiff’s complaint in court was filed on July 20, 2023. On August 16, 2023, however, the Company began to receive notices regarding an initial tranche of approximately 1,300 individual demands that were filed with Judicial Arbitration and Mediation Services, Inc. (“JAMS”) as part of a related mass arbitration claim. The parties participated in mediation proceedings on November 15, 2023 and February 9, 2024. The parties agreed to further discuss settlement options in May 2024, which occurred without resolution. In late May 2024, due to the judge’s retirement, the Gonzalez action was transferred and reassigned to a different judge. Deadlines were therefore reset, including the Company’s motion to dismiss. On June 10, 2024, JAMS advised that it would be pausing its administration of the claims until the parties resolve their dispute over which set of arbitration terms apply to the case. The Company’s motion to dismiss was denied in November 2024. Any liability arising out of these proceedings is not expected to have a material adverse effect on the Company's financial position, results of operations, or cash flows.

The Company is also involved in various legal proceedings arising in the normal course of business. In the opinion of management, any ultimate liability arising out of these proceedings is not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

8. STOCKHOLDERS’ DEFICIT

Rights Offering

On February 6, 2025, the Company completed a Rights Offering pursuant to which the Company distributed to the holders of record of the Company’s Common stock as of the close of business on December 13, 2024, the record date for the Rights Offering, non-transferable subscription rights to purchase, in the aggregate, up to 9.2 million shares of Common stock. Each subscription right entitled its holder to purchase 0.7220 shares of Common stock at a subscription price of $9.75 per whole share of Common stock. Additionally, rights holders who fully exercised their basic subscription rights were entitled to subscribe for additional shares of Common stock that remained unsubscribed as a result of any unexercised basic subscription rights. The subscription price was payable by rights holders (i) in cash, (ii) by delivery in lieu of cash of an equivalent amount of any indebtedness for borrowed money (principal and/or accrued and unpaid interest) owed by the Company to such rights holder, or (iii) by delivery of a combination of cash and such indebtedness. Upon the completion of the Rights Offering, the Company issued 9.2 million shares of Common stock for a total purchase price of $90.0 million.

Mithaq purchased 6.7 million shares of Common stock pursuant to the Rights Offering and currently owns and controls the voting power of 62% of the Company’s outstanding shares of Common stock. It paid (i) $5.1 million of the subscription price for such shares in cash and (ii) the remaining $60.2 million of the subscription price for such shares by delivery of indebtedness for borrowed money owed by the Company to Mithaq pursuant to the Initial Mithaq Term Loan. The Company received approximately $29.8 million in gross cash proceeds from the Rights Offering on February 6, 2025. Substantially all of the gross cash proceeds from the Rights Offering were used towards prepaying the Company’s ABL Credit Facility.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Share Repurchase Program

In November 2021, the Company’s Board of Directors authorized a $250.0 million share repurchase program (the “Share Repurchase Program”). Under this program, the Company may repurchase shares on the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue the program at any time and may thereafter reinstitute purchases, all without prior announcement. Currently, pursuant to the terms of the Company’s Credit Agreement as amended by its Seventh Amendment described above, the repurchase of any shares would require fulfilling the heightened payment conditions under the Credit Agreement, except that repurchases of shares as described below, pursuant to the Company’s practice as a result of its insider trading policy, are expressly permitted. As of August 2, 2025, there was $156.1 million remaining availability under the Share Repurchase Program.

Pursuant to the Company’s practice, including due to restrictions imposed by the Company’s insider trading policy during black-out periods, the Company withholds and repurchases shares of vesting stock awards and makes payments to taxing authorities as required by law to satisfy the withholding tax requirements of all equity award recipients. The Company’s payment of the withholding taxes in exchange for the surrendered shares constitutes a repurchase of its common stock. The Company also acquires shares of its common stock in conjunction with liabilities owed under the Company’s deferred compensation plan, which are held in treasury.

The following table summarizes the Company’s share repurchases:


	Twenty-six Weeks Ended
	August 2, 2025			August 3, 2024
	Shares	Amount		Shares	Amount
	(in thousands)
Share repurchases related to:
Share repurchase program	71	$	422	65	$	566
Shares acquired and held in treasury	—	$	—	5	$	66

In accordance with the FASB ASC 505—Equity, the par value of the shares retired is charged against Common stock and the remaining purchase price is allocated between Additional paid-in capital and Accumulated deficit. The portion charged against Additional paid-in capital is determined using a pro-rata allocation based on total shares outstanding.

Dividends

Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s Board of Directors based on a number of factors, including business and market conditions, the Company’s financial performance, and other investment priorities. Currently, pursuant to the terms of the Company’s Credit Agreement as amended by its Seventh Amendment as described above, the Company has no current plans to pay regular cash dividends in Fiscal 2025.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

9. STOCK-BASED COMPENSATION

The Company generally grants time-vesting stock awards (“Deferred Awards”) and performance-based stock awards (“Performance Awards”) to employees at senior management levels. The Company also grants Deferred Awards to its non-employee independent directors.

The following table summarizes the Company’s stock-based compensation expense (benefit):


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands)
Deferred Awards	$	467	$	(589)	$	1,706	$	1,829
Performance Awards	464		(659)		971		9,532
Total stock-based compensation expense (benefit) (1)	$	931	$	(1,248)	$	2,677	$	11,361

___________________________________________

(1)Stock-based compensation expense (benefit) recorded within Cost of sales (exclusive of depreciation and amortization) amounted to $0.2 million and $0.1 million in the Second Quarter 2025 and Second Quarter 2024, respectively, and $0.4 million and $1.1 million in Year-To-Date 2025 and Year-To-Date 2024, respectively. All other stock-based compensation expense (benefit) is included in Selling, general, and administrative expenses.

During Fiscal 2024, there was a change of control of the Company, which triggered a conversion of all then-outstanding Performance Awards into service-based Performance Awards in accordance with their terms. As a result, the fiscal year 2023, fiscal year 2022, and fiscal year 2021 Performance Awards will all vest or have vested, as applicable, at their target shares on their respective vesting dates without regard to the achievement of any of the performance metrics associated with those awards, provided that the recipient be employed at the Company on each such vesting date. The incremental expense recorded for Performance Awards during Year-To-Date 2024 due to the change of control was $9.9 million.

10. LOSS PER COMMON SHARE

On February 6, 2025, the Company completed its Rights Offering. As the exercise price of the subscription right was less than the fair value of the Common stock, the subscription right contained a bonus element. In connection with this transaction, and in accordance with FASB ASC 260—Earnings Per Share, the Company’s weighted average common shares outstanding and basic and diluted loss per share were retroactively adjusted for all prior periods presented by a factor of 1.002.

The following table reconciles net loss and common share amounts utilized to calculate basic and diluted loss per common share:


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands)
Net loss	$	(5,365)	$	(32,114)	$	(39,388)	$	(69,909)

Basic weighted average common shares outstanding	22,142		12,793		21,885		12,729

Diluted weighted average common shares outstanding	22,142		12,793		21,885		12,729

Anti-dilutive shares excluded from diluted loss per common share calculation	54		34		74		56

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

11. FAIR VALUE MEASUREMENT

The Company’s cash and cash equivalents and investments in the rabbi trust are short-term in nature. As such, their carrying amounts approximate fair value. These assets and liabilities fall within Level 1 of the fair value hierarchy. The Company stock included in the deferred compensation plan is not subject to fair value measurement.

The fair value of the Initial Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $18.4 million as of August 2, 2025, was approximately $15.1 million. The fair value of the New Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $90.0 million as of August 2, 2025, was approximately $82.8 million. The fair value of debt was estimated using a market approach, which considers the Company’s credit risk and market related conditions, and is therefore within Level 2 of the fair value hierarchy.

The Company’s non-financial assets measured at fair value on a nonrecurring basis include long-lived assets, such as intangible assets, fixed assets, and ROU assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to fall within Level 3 of the fair value hierarchy.

Impairment of Long-Lived Assets

The fair value of the Company’s long-lived assets is primarily calculated using a discounted cash-flow model directly associated with those assets, which consist principally of property and equipment and ROU assets. These assets are tested for impairment when events indicate that their carrying value may not be recoverable.

The Company performed periodic quantitative impairment assessments of its long-lived assets and did not record an impairment charge in the Second Quarter 2025 and Year-To-Date 2025, and in the Second Quarter 2024 and Year-To-Date 2024.

Impairment of Indefinite-Lived Intangible Assets

The Company estimates the fair value of its indefinite-lived Gymboree tradename based on an income approach using the relief-from-royalty method. Estimating fair value using this method requires management to estimate future revenues, royalty rates, discount rates, long-term growth rates, and other factors in order to project future cash flows.

The Company performs a periodic impairment assessment of the Gymboree tradename, in accordance with FASB ASC 350 — Intangibles – Goodwill and Other. Based on this assessment, the Company did not identify any indicators of impairment in the Second Quarter 2025 and Year-To-Date 2025. During the Second Quarter 2024, the Company recorded an impairment charge of $28.0 million, primarily due to reductions in Gymboree sales forecasts, which reduced the carrying value of its fair value to $13.0 million as of August 3, 2024.

12. INCOME TAXES

The Company utilizes the asset and liability method of accounting for income taxes as set forth in FASB ASC 740—Income Taxes. This method requires recognition of deferred tax assets and liabilities, measured by currently enacted rates, attributable to temporary differences between the financial statement and income tax basis of assets and liabilities. The Company’s deferred tax assets and liabilities are comprised largely of differences relating to depreciation and amortization, rent expense, inventory, stock-based compensation, net operating loss carryforwards, tax credits, and various accruals and reserves.

The Company’s provision for income taxes was $1.5 million during the Second Quarter 2025, compared to $1.1 million during the Second Quarter 2024. The Company’s effective tax rate was a provision of (37.1)% and (3.6)% in the Second Quarter 2025 and Second Quarter 2024, respectively. The change in the effective tax rate is primarily due to the absence of the impairment charge related to the Gymboree tradename in Fiscal 2024. The Company continues to adjust its valuation allowance based upon its ongoing operating results.

The Company’s provision for income taxes was $2.8 million during Year-To-Date 2025, compared to $3.2 million during Year-To-Date 2024. The Company’s effective tax rate was a provision of (7.6)% and (4.8)% in Year-To-Date 2025 and Year-To-Date 2024, respectively. The change in the effective tax rate is primarily due to the absence of the impairment charge related to the Gymboree tradename in Fiscal 2024. The Company continues to adjust its valuation allowance based upon its ongoing operating results.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act allows net operating losses (“NOLs”) incurred in taxable years 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to offset 100% of taxable income and to generate a refund of previously paid income taxes. Pursuant to the CARES Act, the Company carried back the taxable year 2020 tax loss of $150.0 million to prior years. As of August 2, 2025, the remaining income tax receivable of $19.1 million is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

The Company accrues interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. The total amount of unrecognized tax benefits was $6.7 million, $6.5 million, and $7.8 million as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively, and is included within long-term liabilities. Additional interest expense recognized in the Second Quarter 2025 and Second Quarter 2024, and during Year-To-Date 2025 and Year-To-Date 2024, related to unrecognized tax benefits was not significant.

The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong. The Company files a consolidated U.S. income tax return for federal income tax purposes. The Company is no longer subject to income tax examinations by U.S. federal, state and local or foreign tax authorities for tax years 2015 and prior.

The Internal Revenue Service is currently conducting an examination of the Company’s tax return for fiscal year 2020 in conjunction with its review of the CARES Act NOL carryback to earlier fiscal years. The Company believes that its reserves for uncertain tax positions are adequate to cover existing risks or exposures. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues arise as a result of a tax audit, and are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the United States. The legislation contains certain provisions related to the full expensing of U.S. research and development costs and other depreciable property. The legislation also includes changes to the determination of the amount of U.S. interest expense that is deductible for U.S. tax purposes. While these changes are generally favorable to the Company’s cash tax position, the legislation does not have a material impact on its estimated annual effective tax rate and financial statements as of the Second Quarter 2025. The Company is evaluating the effects of the legislation that will begin to apply in fiscal year 2026.

13. SEGMENT INFORMATION

The Company’s reportable segments are based on the financial information the chief operating decision maker (“CODM”) uses to allocate resources and assess performance of its business. The Company’s President and Interim Chief Executive Officer is the CODM. The Company’s CODM evaluates the performance of each segment and measures its segment profitability based on operating income (loss), defined as income (loss) before interest and taxes. Operating income (loss) is used as a key metric during the annual budget process, and on a quarterly basis to monitor actual performance against the annual budget and forecasts.

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 net sales from the Company’s U.S.-based wholesale business. Included in The Children’s Place International segment are the Company’s Canadian-based stores and net sales from international franchisees. 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.

Major Customers

Net sales to external customers are derived from merchandise sales, and the Company has one U.S. wholesale customer that individually accounted for more than 10% of its net sales, amounting to $42.3 million and $74.5 million for the Second Quarter 2025 and Year-To-Date 2025, respectively, and $44.5 million and $61.0 million for the Second Quarter 2024 and Year-To-Date 2024, respectively. The customer also accounts for a majority of the Company’s accounts receivable, amounting to $31.8 million, $31.6 million, and $38.2 million as of August 2, 2025, February 1, 2025, and August 3, 2024.

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Store Count by Segment

As of August 2, 2025, The Children’s Place U.S. had 437 stores and The Children’s Place International had 57 stores. As of August 3, 2024, The Children’s Place U.S. had 452 stores and The Children’s Place International had 63 stores.

The tables below present certain segment information for our reportable segments for the periods indicated:


	Thirteen Weeks Ended August 2, 2025
	The Children’s Place U.S.		The Children’s Place International (1)		Total
	(in thousands)
Net sales	$	273,187	$	24,819	$	298,006
Cost of sales (2)	178,614		18,120		196,734
Selling, general, and administrative expenses (3)	88,289		8,877		97,166

Segment operating income (loss)	$	6,284	$	(2,178)	$	4,106
Segment operating income (loss) as a percentage of net sales	2.3%		(8.8)%		1.4%


	Twenty-six Weeks Ended August 2, 2025
	The Children’s Place U.S.		The Children’s Place International (1)		Total
	(in thousands)
Net sales	$	494,954	$	45,177	$	540,131
Cost of sales (2)	332,600		35,476		368,076
Selling, general, and administrative expenses (3)	175,785		16,281		192,066

Segment operating loss	$	(13,431)	$	(6,580)	$	(20,011)
Segment operating loss as a percentage of net sales	(2.7)%		(14.6)%		(3.7)%


	Thirteen Weeks Ended August 3, 2024
	The Children’s Place U.S.		The Children’s Place International (1)		Total
	(in thousands)
Net sales	$	292,393	$	27,262	$	319,655
Cost of sales (2)	186,914		20,947		207,861
Selling, general, and administrative expenses (3)	97,152		8,418		105,570
Other segment expenses (4)	28,000		—		28,000
Segment operating loss	$	(19,673)	$	(2,103)	$	(21,776)
Segment operating loss as a percentage of net sales	(6.7)%		(7.7)%		(6.8)%

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Twenty-six Weeks Ended August 3, 2024
	The Children’s Place U.S.		The Children’s Place International (1)		Total
	(in thousands)
Net sales	$	538,581	$	48,952	$	587,533
Cost of sales (2)	346,076		36,922		382,998
Selling, general, and administrative expenses (3)	208,157		18,142		226,299
Other segment expenses (4)	28,000		—		28,000
Segment operating loss	$	(43,652)	$	(6,112)	$	(49,764)
Segment operating income loss as a percentage of net sales	(8.1)%		(12.5)%		(8.5)%

___________________________________________

(1)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.

(2)Cost of sales includes the cost of inventory sold, certain buying, design, and distribution expenses, shipping and handling costs on merchandise sold directly to customers, and all occupancy costs, except for administrative office buildings.

(3)Selling, general, and administrative expenses include store expenses, marketing, corporate payroll, including long-term incentive compensation, information technology, other administrative expenses, and depreciation and amortization.

(4)Other segment expenses include asset impairment charges.

The table below presents a reconciliation of reportable segment operating income (loss) to Loss before provision for income taxes:


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands)
Total segment operating income (loss)	$	4,106	$	(21,776)	$	(20,011)	$	(49,764)
Related party interest expense	(1,868)		(2,087)		(3,740)		(2,476)
Other interest expense	(6,167)		(7,158)		(12,867)		(14,501)
Interest income	17		14		27		25
Loss before provision for income taxes	$	(3,912)	$	(31,007)	$	(36,591)	$	(66,716)

Additional Segment Data


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
	(in thousands)
Depreciation and amortization:
The Children’s Place U.S.	$	7,025	$	8,835	$	14,681	$	18,489
The Children’s Place International	545		670		1,119		2,651
Total depreciation and amortization	$	7,570	$	9,505	$	15,800	$	21,140
Capital expenditures:
The Children’s Place U.S.	$	1,134	$	7,720	$	4,407	$	12,398
The Children’s Place International	296		64		436		80
Total capital expenditures	$	1,430	$	7,784	$	4,843	$	12,478

THE CHILDREN’S PLACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	August 2, 2025		February 1, 2025		August 3, 2024
	(in thousands)
Total assets:
The Children’s Place U.S.	$	760,234	$	711,564	$	879,609
The Children’s Place International	44,863		35,988		41,805
Total assets	$	805,097	$	747,552	$	921,414
Long-lived assets:
United States	$	247,040	$	267,751	$	283,118
Canada	11,848		9,801		10,730
Asia	2,354		1,996		224
Total long-lived assets (1)	$	261,242	$	279,548	$	294,072

___________________________________________

(1)The Company’s long-lived assets are comprised of net Property and equipment, ROU assets, Tradenames, and Other assets, and are recorded in the long-term assets section of the consolidated balance sheets.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report on Form 10-Q contains or may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and results of operations, including adjusted net income (loss) per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate,” “believe,” and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the "Risk Factors" section of its annual report on Form 10-K for the fiscal year ended February 1, 2025. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unable to achieve operating results at levels sufficient to fund and/or finance the Company’s current level of operations and repayment of indebtedness, the risk that changes in trade policy and tariff regimes, including newly imposed U.S. tariffs and any responsive non-U.S. tariffs, may impact the Company’s international manufacturing and operations or customers’ discretionary spending habits, the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by changes in economic conditions (including inflation), the risk that changes in the Company’s plans and strategies with respect to pricing, capital allocation, capital structure, investor communications and/or operations may have a negative effect on the Company’s business, the risk that the Company’s strategic initiatives to increase sales and margin, improve operational efficiencies, enhance operating controls, decentralize operational authority and reshape the Company’s culture are delayed or do not result in anticipated improvements, the risk of delays, interruptions, disruptions and higher costs in the Company’s global supply chain, including resulting from disease outbreaks, foreign sources of supply in less developed countries, more politically unstable countries, or countries where vendors fail to comply with industry standards or ethical business practices, including the use of forced, indentured or child labor, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, various types of litigation, including class action litigation brought under securities, consumer protection, employment, and privacy and information security laws and regulations, risks related to the existence of a controlling stockholder, and the uncertainty of weather patterns, as well as other risks discussed in the Company’s filings with the SEC from time to time. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

As used in this Quarterly Report on Form 10-Q, references to the “Company”, “The Children’s Place”, “we”, “us”, “our”, and similar terms refer to The Children’s Place, Inc. and its subsidiaries.

The following discussion should be read in conjunction with the Company’s unaudited financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the annual audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 1, 2025.

Terms that are commonly used in our Management’s Discussion and Analysis of Financial Condition and Results of Operations are defined as follows:

•Second Quarter 2025 — The thirteen weeks ended August 2, 2025

•Second Quarter 2024 — The thirteen weeks ended August 3, 2024

•Year-To-Date 2025 — The twenty-six weeks ended August 2, 2025

•Year-To-Date 2024 — The twenty-six weeks ended August 3, 2024

•Fiscal 2025 — The fifty-two weeks ending January 31, 2026

•Fiscal 2024 — The fifty-two weeks ended February 1, 2025

•SEC — U.S. Securities and Exchange Commission

•U.S. GAAP — Generally Accepted Accounting Principles in the United States

•FASB — Financial Accounting Standards Board

•AUR — Average unit retail price

•Comparable Retail Sales — Net sales from stores that have been open for at least 14 consecutive months and from our e-commerce store, excluding postage and handling fees. Store closures in the current fiscal year will be excluded from Comparable Retail Sales beginning in the fiscal quarter in which the store closes. A store that is closed for a substantial remodel, relocation, or material change in size will be excluded from Comparable Retail Sales for at least 14 months beginning in the fiscal quarter in which the closure occurred. However, stores that temporarily close will be excluded from Comparable Retail Sales until the store is reopened for a full fiscal month.

•Cost of Sales — Cost of inventory sold, including certain buying, design, and distribution expenses, and shipping and handling costs on merchandise sold, and all occupancy costs, except for administrative office buildings

•Gross Margin — Gross profit expressed as a percentage of Net sales

•SG&A — Selling, general, and administrative expenses

OVERVIEW

Our Business

We are the largest pure-play children’s specialty retailer in North America with an omni-channel portfolio of brands and an industry-leading digital-first model. We design, contract to manufacture, and sell fashionable, high quality apparel, accessories and footwear predominantly at value prices, primarily under our proprietary brands: “The Children’s Place”, “Gymboree”, “Sugar & Jade”, and “PJ Place”. Our global retail and wholesale network includes two digital storefronts, 494 stores in North America, wholesale marketplaces, 229 international points of distribution in 12 countries through our seven international franchise and wholesale partners, and social media channels on Instagram, Facebook, X, formerly known as Twitter, YouTube and Pinterest. Our digital storefronts are at www.childrensplace.com and www.gymboree.com, where our customers are able to shop online for the same merchandise available in our physical stores, but also certain exclusive merchandise only available at our e-commerce sites.

Segment Reporting

In accordance with FASB ASC 280—Segment Reporting, we report 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 our U.S. and Puerto Rico-based stores and net sales from our U.S.-based wholesale business. Included in The Children’s Place International segment are our Canadian-based stores and net sales from international franchisees. We measure our segment profitability based on operating income (loss), defined as income (loss) 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. We periodically review these allocations and adjust them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales, and we have one U.S. wholesale customer that individually accounted for more than 10% of our net sales for the Second Quarter 2025 and Year-To-Date 2025.

Recent Developments

Macroeconomic conditions, including inflationary pressures, higher interest rates, tariffs, and other domestic and geopolitical factors, continued to adversely affect our core customer. During the Second Quarter 2025, these pressures contributed to a decrease in consumer discretionary apparel purchases. We expect these macroeconomic conditions, including but not limited to increased product input costs, transportation costs, distribution costs, and geopolitical conditions like changes in foreign policies of the United States, and other inflationary pressures, to continue to have an adverse impact during the remainder of Fiscal 2025.

During Fiscal 2025, the U.S. government announced the intention to impose tariffs on certain goods imported from all countries importing goods to the United States. We have assessed the potential impact of tariffs that have become effective and are implementing plans to reduce their financial impact on us. We will continue to monitor the impact of any further tariffs that may become effective in the future, as well as potential retaliatory tariffs imposed by other countries. These tariffs could have a material adverse impact on the global retail industry, supply chains worldwide, and other political and macroeconomic conditions, which could also affect customer sentiment in deciding whether to purchase U.S. goods as opposed to other alternatives. In the meantime, we are benefiting from our diversified sourcing strategies, which includes our efforts to ensure no single country represents more than 20% of our total sourcing capacity, with limited exposure to China in the mid-single digit range.

We will be implementing an in-depth long-range plan that will better streamline our operations to yield over $40 million of benefits over the next three years. We will be focused on reducing unnecessary corporate office costs, optimizing our distribution network, and right-sizing non-merchandise and third-party spend. These expense savings will further support our changing business model, including our strategic shift from closing stores to opening stores instead, as we revitalize the overall experience for our customers both in-store and online. Our transformation efforts also include a review of our corporate cost structure, to seek further opportunities to augment our staffing and optimize our corporate payroll. These transformation efforts are expected to incur certain one-time costs amounting to approximately $5 million to $10 million.

Pillar Two Model Rules

The Organization for Economic Cooperation and Development (“OECD”) introduced a global minimum corporate tax rate of 15% under its Pillar Two initiative (“Pillar Two”), which became effective for tax years beginning in January 2024. Although the U.S. has not yet implemented the Pillar Two rules, other regions where we conduct business, primarily Hong Kong and Canada, have enacted such legislation. The implementation of the Pillar Two rules in each jurisdiction in which it operates is not expected to have a material impact on our effective tax rate. We are closely monitoring legislative developments globally to evaluate potential impacts on our financial statements, as more regions implement Pillar Two rules.

RESULTS OF OPERATIONS

We believe that our e-commerce and brick-and-mortar retail store operations are highly interdependent, with both sharing common customers purchasing from a common pool of product inventory. Accordingly, we believe that consolidated omni-channel reporting presents the most meaningful and appropriate measure of our performance. We primarily evaluate the results of our operations as a percentage of Net sales rather than in terms of absolute dollar increases or decreases by analyzing the year over year change in our business expressed as a percentage of Net sales (i.e., “basis points”).

Non-GAAP Reconciliation

We have presented certain measures on a non-GAAP basis. Adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted selling, general, and administrative expenses, and adjusted operating income (loss) are non-GAAP measures. These measures are not intended to replace GAAP financial information, and may be different from non-GAAP measures reported by other companies. The most comparable GAAP measures are net income (loss), net income (loss) per diluted share, selling, general, and administrative expenses, and operating income (loss), respectively. We believe the income and expense items excluded as non-GAAP adjustments are not reflective of the performance of our core business, and that providing this supplemental disclosure to investors will facilitate comparisons of the past and present performance of our core business.

Second Quarter 2025 Compared to Second Quarter 2024


	Thirteen Weeks Ended				Thirteen Weeks Ended				Variance
	August 2, 2025		% of Net Sales		August 3, 2024		% of Net Sales		$		%		% of Net Sales
	(amounts in thousands)
Net sales	$	298,006	100.0	%	$	319,655	100.0	%	$	(21,649)	(6.8)	%	—	%
Cost of sales (exclusive of depreciation and amortization)	196,734		66.0	%	207,861		65.0	%	11,127		5.4	%	(1.0)	%
Gross profit	101,272		34.0	%	111,794		35.0	%	(10,522)		(9.4)	%	(1.0)	%
Selling, general, and administrative expenses	89,596		30.1	%	96,065		30.1	%	6,469		6.7	%	—	%
Depreciation and amortization	7,570		2.5	%	9,505		3.0	%	1,935		20.4	%	0.5	%
Asset impairment charges	—		—	%	28,000		8.8	%	28,000		100.0	%	8.8	%
Operating income (loss)	4,106		1.4	%	(21,776)		(6.8)	%	25,882		118.9	%	8.2	%
Related party interest expense	(1,868)		(0.6)	%	(2,087)		(0.7)	%	219		10.5	%	0.1	%
Other interest expense, net	(6,150)		(2.1)	%	(7,144)		(2.2)	%	994		13.9	%	0.1	%
Loss before provision for income taxes	(3,912)		(1.3)	%	(31,007)		(9.7)	%	27,095		87.4	%	8.4	%
Provision for income taxes	1,453		0.5	%	1,107		0.3	%	(346)		(31.3)	%	(0.2)	%
Net loss	$	(5,365)	(1.8)	%	$	(32,114)	(10.0)	%	$	26,749	83.3	%	8.2	%

Net sales decreased $21.7 million, or 6.8%, to $298.0 million during the Second Quarter 2025 from $319.7 million during the Second Quarter 2024, driven by a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume due to lower traffic. We also experienced a decrease in e-commerce sales due to lower traffic and conversion compared to the Second Quarter 2024, however, these trends have improved since the first quarter of Fiscal 2025, due to shifts in our marketing strategies combined with the impact of our new product strategies. Our stores and e-commerce sales were both negatively impacted by the current macroeconomic environment, including uncertainty around potential tariffs, which has negatively affected consumer sentiment. Comparable retail sales decreased 4.7% for the Second Quarter 2025.

Gross profit decreased $10.5 million to $101.3 million during the Second Quarter 2025, compared to $111.8 million during the Second Quarter 2024. Gross margin decreased 100 basis points to 34.0% of Net sales in the Second Quarter 2025, compared to 35.0% of Net sales in the Second Quarter 2024. The decrease in gross margin was caused by adjustments associated with our decrease in inventory balance compared to the Second Quarter 2024 and shifts in channel mix, partially offset by favorable product margins and improvements in product mix, pricing and promotions.

Gross profit is calculated as consolidated net sales less cost of goods sold. Gross margin is calculated as gross profit divided by consolidated net sales. Gross profit as a percentage of net sales is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, the timing and level of promotional activities, changes in foreign currency exchange rates, and fluctuations in input costs. These factors, among others, may cause gross profit as a percentage of net sales to fluctuate from period to period.

Selling, general, and administrative expenses were $89.6 million during the Second Quarter 2025, compared to $96.1 million during the Second Quarter 2024. The decrease was primarily due to a reduction in one-time restructuring costs incurred in the Second Quarter 2024 due to the departure of certain members of the senior leadership team, partially offset by an increase in marketing expense as we continue to invest in top of funnel and brand building initiatives. The Second Quarter 2025 results included incremental operating expenses of $2.0 million, including restructuring costs of $1.2 million and an $0.8 million accrual for legal settlement. The Second Quarter 2024 results included incremental operating expenses, including restructuring costs of $6.1 million, credit agreement lender-required consulting costs of $1.1 million, professional and consulting fees of $0.4 million, and fleet optimization costs of $0.1 million. Excluding the impact of these incremental charges, Adjusted SG&A expenses were $87.6 million during the Second Quarter 2025, compared to $88.3 million during the Second Quarter 2024, and deleveraged 180 basis points to 29.4% of Net sales, due to lower sales.

Depreciation and amortization was $7.6 million during the Second Quarter 2025, compared to $9.5 million during the Second Quarter 2024. The decrease was primarily driven by reduced depreciation of capitalized software and the permanent closure of 23 stores during the past twelve months, partially offset by two store openings.

There were no Asset impairment charges during the Second Quarter 2025, compared to $28.0 million during the Second Quarter 2024 due to the reduction in fair value of the Gymboree tradename.

Operating income (loss) was an income of $4.1 million during the Second Quarter 2025, compared to a loss of $(21.8) million during the Second Quarter 2024. The Second Quarter 2025 results were impacted by incremental operating expenses of $2.0 million, as described within SG&A expenses above. The Second Quarter 2024 results were impacted by incremental operating expenses, including SG&A expenses of $7.7 million, as described above, an impairment charge of $28.0 million on the Gymboree tradename, and accelerated depreciation of $0.3 million. Excluding the impact of these incremental charges, Adjusted operating income was $6.1 million in the Second Quarter 2025, compared to $14.2 million in the Second Quarter 2024, and deleveraged 250 basis points to 2.0% of Net sales.

Related party interest expense was $1.9 million during the Second Quarter 2025, compared to $2.1 million during the Second Quarter 2024. The decrease was driven by a lower average interest rate on the New Mithaq Term Loan, as described below.

Other interest expense, net was $6.2 million during the Second Quarter 2025, compared to $7.1 million during the Second Quarter 2024. The decrease in interest expense was primarily driven by lower average borrowings on our asset-based revolving credit facility (the “ABL Credit Facility”) and lower average interest rates.

Provision for income taxes was $1.5 million during the Second Quarter 2025, compared to $1.1 million during the Second Quarter 2024. Our effective tax rate was a provision of (37.1)% and (3.6)% in the Second Quarter 2025 and Second Quarter 2024, respectively. We continue to adjust our valuation allowance based on ongoing operating results.

Net loss was $(5.4) million, or $(0.24) per diluted share, during the Second Quarter 2025, compared to $(32.1) million, or $(2.51) per diluted share, during the Second Quarter 2024, due to the factors discussed above. Adjusted net loss was $(3.4) million, or $(0.15) per diluted share during the Second Quarter 2025, compared to adjusted net income of $3.9 million, or $0.30 per diluted share, during the Second Quarter 2024, due to the factors described above.

The following table sets forth Net sales and Operating income (loss), respectively, by segment, for the periods indicated:


	Thirteen Weeks Ended
	August 2, 2025			August 3, 2024
	(in thousands)
The Children’s Place U.S.	$	273,187		$	292,393
The Children’s Place International (1)	24,819			27,262
Total net sales	$	298,006		$	319,655

The Children’s Place U.S.	$	6,284		$	(19,673)
The Children’s Place International (1)	(2,178)			(2,103)
Total segment operating income (loss)	$	4,106		$	(21,776)

The Children’s Place U.S.	2.3		%	(6.7)		%
The Children’s Place International (1)	(8.8)		%	(7.7)		%
Total segment operating income (loss) as a percentage of net sales	1.4		%	(6.8)		%

___________________________________________

The Children’s Place U.S. Net sales decreased $19.2 million, or 6.6%, to $273.2 million during the Second Quarter 2025, compared to $292.4 million during the Second Quarter 2024, driven by a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume due to lower traffic. We also experienced a decrease in e-commerce sales due to lower traffic and conversion compared to the Second Quarter 2024.

The Children’s Place International Net sales decreased $2.5 million, or 9.0%, to $24.8 million during the Second Quarter 2025, compared to $27.3 million during the Second Quarter 2024, driven by a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume due to lower traffic. We also experienced a decrease in e-commerce sales due to lower traffic and conversion compared to the Second Quarter 2024.

The Children’s Place U.S. Operating income was $6.3 million during the Second Quarter 2025, compared to a loss of $(19.7) million during the Second Quarter 2024. The Children’s Place U.S. operating margin improved during the Second Quarter 2025, primarily due to the impairment charge on the Gymboree tradename during the Second Quarter 2024.

The Children’s Place International Operating loss was $(2.2) million during the Second Quarter 2025, compared to $(2.1) million during the Second Quarter 2024.

Year-To-Date 2025 Compared to Year-To-Date 2024


	Twenty-six Weeks Ended				Twenty-six Weeks Ended				Variance
	August 2, 2025		% of Net Sales		August 3, 2024		% of Net Sales		$		%		% of Net Sales
	(amounts in thousands)
Net sales	$	540,131	100.0	%	$	587,533	100.0	%	$	(47,402)	(8.1)	%	—	%
Cost of sales (exclusive of depreciation and amortization)	368,076		68.1	%	382,998		65.2	%	14,922		3.9	%	(2.9)	%
Gross profit	172,055		31.9	%	204,535		34.8	%	(32,480)		(15.9)	%	(2.9)	%
Selling, general, and administrative expenses	176,266		32.6	%	205,159		34.9	%	28,893		14.1	%	2.3	%
Depreciation and amortization	15,800		2.9	%	21,140		3.6	%	5,340		25.3	%	0.7	%
Asset impairment charges	—		—	%	28,000		4.8	%	28,000		100.0	%	4.8	%
Operating loss	(20,011)		(3.7)	%	(49,764)		(8.5)	%	29,753		59.8	%	4.8	%
Related party interest expense	(3,740)		(0.7)	%	(2,476)		(0.4)	%	(1,264)		(51.1)	%	(0.3)	%
Other interest expense, net	(12,840)		(2.4)	%	(14,476)		(2.5)	%	1,636		11.3	%	0.1	%
Loss before provision for income taxes	(36,591)		(6.8)	%	(66,716)		(11.4)	%	30,125		45.2	%	4.6	%
Provision for income taxes	2,797		0.5	%	3,193		0.5	%	396		12.4	%	—	%
Net loss	$	(39,388)	(7.3)	%	$	(69,909)	(11.9)	%	$	30,521	43.7	%	4.6	%

Net sales decreased $47.4 million, or 8.1%, to $540.1 million during Year-To-Date 2025 from $587.5 million during Year-To-Date 2024, driven by a decrease in e-commerce sales due to lower traffic and conversion. We also experienced a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume due to lower traffic. Our stores and e-commerce sales were both negatively impacted by the current macroeconomic environment, including uncertainty around potential tariffs, which has negatively affected consumer sentiment. This was partially offset by an increase in wholesale revenue. Comparable retail sales decreased 8.9% during Year-To-Date 2025.

Gross profit decreased $32.5 million to $172.1 million during Year-To-Date 2025, compared to $204.5 million during Year-To-Date 2024. Gross margin decreased 290 basis points to 31.9% of Net sales during Year-To-Date 2025, compared to 34.8% of Net sales in Year-To-Date 2024. The decrease in gross margin was caused by adjustments associated with our decrease in inventory balance compared to the prior year and shifts in channel mix from the higher penetration of wholesale sales, partially offset by favorable product margins and improvements in pricing and promotions.

Selling, general, and administrative expenses were $176.3 million during Year-To-Date 2025, compared to $205.2 million during Year-To-Date 2024. The decrease was due to a reduction in one-time costs incurred during Year-To-Date 2025, as described below. The Year-To-Date 2025 results included incremental operating expenses of $2.1 million for restructuring costs. The Year-To-Date 2024 results included incremental operating expenses, including costs associated with our change of control of $13.7 million, financing related charges of $6.7 million, restructuring costs of $6.4 million, credit agreement lender-required consulting costs of $1.9 million, costs associated with the closure of our Canada distribution center of $0.8 million, fleet optimization costs of $0.7 million, and professional and consulting fees of $0.4 million, partially offset by the reversal of a legal settlement accrual of $2.3 million. Excluding the impact of these incremental charges, Adjusted SG&A expenses were $174.2 million during Year-To-Date 2025, compared to $177.0 million during Year-To-Date 2024, and deleveraged 210 basis points to 32.2% of Net sales.

Depreciation and amortization was $15.8 million during Year-To-Date 2025, compared to $21.1 million during Year-To-Date 2024. The decrease was primarily driven by reduced depreciation of capitalized software and the permanent closure of 23 stores during the past twelve months, partially offset by two store openings.

There were no Asset impairment charges during Year-To-Date 2025, compared to $28.0 million during Year-To-Date 2024 due to the reduction in fair value of the Gymboree tradename.

Operating loss was $(20.0) million during Year-To-Date 2025, compared to $(49.8) million during Year-To-Date 2024. The Year-To-Date 2025 results were impacted by incremental operating expenses of $2.1 million, as described within SG&A expenses above. The Year-To-Date 2024 results were impacted by incremental operating expenses, including SG&A expenses of $28.2 million, as described above, an impairment charge of $28.0 million on the Gymboree tradename, accelerated depreciation of $1.8 million, and additional change in control charges impacting gross margin of $0.9 million. Excluding the impact of these incremental charges, Adjusted operating loss was $(17.9) million during Year-To-Date 2025, compared to Adjusted operating income of $9.2 million during Year-To-Date 2024, and deleveraged 490 basis points to (3.3)% of Net sales.

Related party interest expense was $3.7 million during Year-To-Date 2025, compared to $2.5 million during Year-To-Date 2024. The increase was due to interest-equivalent charges for the full period compared to a partial period in the prior year.

Other interest expense, net was $12.8 million during Year-To-Date 2025, compared to $14.5 million during Year-To-Date 2024. The decrease in interest expense was primarily driven by lower average interest rates on our ABL Credit Facility, partially offset by the write-off of deferred financing costs associated with the partial paydown of our first term loan entered into with our majority shareholder, Mithaq Capital SPC (“Mithaq”).

Provision for income taxes was $2.8 million during Year-To-Date 2025, compared to $3.2 million during Year-To-Date 2024. Our effective tax rate was a provision of (7.6)% and (4.8)% during Year-To-Date 2025 and Year-To-Date 2024, respectively. We continue to adjust our valuation allowance based on ongoing operating results.

Net loss was $(39.4) million, or $(1.80) per diluted share, during Year-To-Date 2025, compared to $(69.9) million, or $(5.49) per diluted share, during Year-To-Date 2024, due to the factors discussed above. Adjusted net loss was $(36.3) million, or $(1.66) per diluted share during Year-To-Date 2025, compared to $(11.0) million, or $(0.86) per diluted share, during Year-To-Date 2024, due to the factors described above.

The following table sets forth Net sales and Operating loss, respectively, by segment, for the periods indicated:


	Twenty-six Weeks Ended
		August 2, 2025			August 3, 2024
		(in thousands)
The Children’s Place U.S.		$	494,954		$	538,581
The Children’s Place International (1)		45,177			48,952
Total net sales		$	540,131		$	587,533

The Children’s Place U.S.		$	(13,431)		$	(43,652)
The Children’s Place International (1)		(6,580)			(6,112)
Total segment operating loss		$	(20,011)		$	(49,764)

The Children’s Place U.S.		(2.7)		%	(8.1)		%
The Children’s Place International (1)		(14.6)		%	(12.5)		%
Total segment operating loss as a percentage of net sales		(3.7)		%	(8.5)		%

___________________________________________

The Children’s Place U.S. Net sales decreased $43.6 million, or 8.1%, to $495.0 million during Year-To-Date 2025, compared to $538.6 million during Year-To-Date 2024, driven by a decrease in e-commerce sales due to lower traffic and conversion. We also experienced a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume due to lower traffic. This was partially offset by an increase in wholesale revenue.

The Children’s Place International Net sales decreased $3.8 million, or 7.8%, to $45.2 million during Year-To-Date 2025, compared to $49.0 million during Year-To-Date 2024, driven by a decrease in e-commerce sales due to lower traffic and conversion. We also experienced a decrease in brick-and-mortar revenue due to a lower store count and lower sales volume due to lower traffic.

The Children’s Place U.S. Operating loss was $(13.4) million during Year-To-Date 2025, compared to $(43.7) million during Year-To-Date 2024. The Children’s Place U.S. operating margin improved during Year-To-Date 2025, primarily due to the impairment charge on the Gymboree tradename during Year-To-Date 2024.

The Children’s Place International Operating loss was $(6.6) million during Year-To-Date 2025, compared to $(6.1) million during Year-To-Date 2024.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our working capital needs typically follow a seasonal pattern, peaking during the third fiscal quarter based on seasonal inventory purchases. Our primary uses of cash are for working capital requirements, which consist primarily of inventory purchases, rent and marketing expenses; the payment of interest expense on our ABL Credit Facility and interest-equivalent expense on our New Mithaq Term Loan as described below, and the financing of capital projects.

During Fiscal 2024, we entered into an interest-free, unsecured and subordinated promissory note with Mithaq for a $78.6 million term loan (the “Initial Mithaq Term Loan”), and a separate unsecured and subordinated promissory note for a $90.0 million term loan (the “New Mithaq Term Loan”; and together with the Initial Mithaq Term Loan, collectively, the “Mithaq Term Loans”). As of February 6, 2025, $60.2 million under the Initial Mithaq Term Loan was repaid pursuant to the completion of the Rights Offering, leaving an aggregate of $108.4 million outstanding under the Mithaq Term Loans as of August 2, 2025.

As of August 2, 2025, we had $294.4 million of outstanding borrowings under our $433.0 million ABL Credit Facility and no borrowings under our $40.0 million senior unsecured credit facility with Mithaq (the “Mithaq Credit Facility”).

Our working capital deficit decreased $31.1 million to $40.0 million as of August 2, 2025, compared to $71.2 million as of August 3, 2024, primarily reflecting a decrease in our accounts payable balances as we paid down past due vendors and reduced inventory purchases, and a decrease in outstanding borrowings under our ABL Credit Facility, partially offset by a decrease in inventory due to improved inventory management as we continue to align our inventory levels with our growth and product strategy, and better balance the mix of fashion and basic product.

As of August 2, 2025, we had total liquidity of $91.6 million, including $43.8 million of availability under our ABL Credit Facility, $40.0 million of availability under our Mithaq Credit Facility, and $7.8 million of cash on hand. As of August 2, 2025, we had $18.2 million of outstanding letters of credit, with an additional $6.8 million available for issuing letters of credit under our ABL Credit Facility.

We expect to be able to meet our working capital and capital expenditure requirements for at least the next twelve months from the date that our consolidated financial statements for the Second Quarter 2025 were issued, by using our cash on hand, cash flows from operations, and availability under our ABL Credit Facility and Mithaq Credit Facility.

Share Repurchase Program

In November 2021, our Board of Directors (the “Board”) authorized a $250.0 million share repurchase program (the “Share Repurchase Program”). Currently, given the terms of our credit agreement with Wells Fargo and other lenders, as amended by its seventh amendment, the repurchase of any shares would require fulfilling the heightened payment conditions under that credit agreement, except that repurchases of shares as described in “Note 8. Stockholders’ Deficit” of the consolidated financial statements, pursuant to our practice as a result of our insider trading policy, are expressly permitted. As of August 2, 2025, there was $156.1 million remaining availability under the Share Repurchase Program.

Cash Flows and Capital Expenditures

Cash used in operating activities was $73.4 million during Year-To-Date 2025, compared to $194.7 million during Year-To-Date 2024. The decrease in cash used in operating activities during Year-To-Date 2025 was primarily the result of a smaller increase in our inventory balance compared to Year-To-Date 2024, as we continue to scale our inventory levels.

Cash used in investing activities was $4.8 million during Year-To-Date 2025, compared to $12.5 million during Year-To-Date 2024, driven by lower capital expenditures.

Cash provided by financing activities was $77.8 million during Year-To-Date 2025, compared to $203.7 million during Year-To-Date 2024. The decrease primarily resulted from proceeds received from the Mithaq Term Loans during Fiscal 2024 and lower net borrowings on our ABL Credit Facility, partially offset by the net cash proceeds received from the Rights Offering completed during Fiscal 2025.

Our ability to continue to meet our capital requirements in Fiscal 2025 depends on our cash on hand, our ability to generate cash flows from operations, and available borrowings under our ABL Credit Facility and Mithaq Credit Facility. Cash flows generated from operations depends on our ability to achieve our financial plans. We believe that our cash on hand, cash generated from operations, and funds available to us through our ABL Credit Facility and Mithaq Credit Facility will be sufficient to fund our capital and other cash requirements for the foreseeable future.

Selected Consolidated Balance Sheets Data

Certain components of our Consolidated Balance Sheets as of August 2, 2025, February 1, 2025, and August 3, 2024 were as follows:


	August 2, 2025		February 1, 2025		August 3, 2024
	(in thousands)
Accounts receivable	$	54,365	$	42,701	$	61,926
Inventories	442,705		399,602		520,593
Accounts payable	132,436		126,716		215,793

Accounts receivable were $54.4 million as of August 2, 2025, compared to $61.9 million as of August 3, 2024 and $42.7 million as of February 1, 2025. The decrease of $7.6 million, or 12.2%, compared to August 3, 2024 was primarily driven by a decrease in wholesale receivables. The increase of $11.7 million, or 27.3%, compared to February 1, 2025 was primarily driven by an increase in credit card receivables, in line with the seasonality of our business.

Inventories were $442.7 million as of August 2, 2025, compared to $520.6 million as of August 3, 2024 and $399.6 million as of February 1, 2025. The decrease of $77.9 million, or 15.0% compared to August 3, 2024 was primarily driven by improved inventory management as we continue to align our inventory levels with our growth and product strategy, and better balance the mix of fashion and basic product. The increase of $43.1 million, or 10.8%, compared to February 1, 2025 was primarily driven by a higher number of units on hand, as we build inventory levels for back-to-school and holiday season.

Accounts payable were $132.4 million as of August 2, 2025, compared to $215.8 million as of August 3, 2024 and $126.7 million as of February 1, 2025. The decrease of $83.4 million, or 38.6%, compared to August 3, 2024 was primarily the result of lower inventory purchases and paying down past due vendors that existed at the end of the Second Quarter 2024. There was no significant change in balance compared to February 1, 2025.

ABL Credit Facility

The Company and certain subsidiaries maintain the $433.0 million ABL Credit Facility under our Amended and Restated Credit Agreement dated May 9, 2019 (as amended from time to time, the “Credit Agreement”), with Wells Fargo Bank, National Association (“Wells Fargo”), Bank of America, N.A., JPMorgan Chase Bank, N.A., Truist Bank, HSBC Bank (USA), N.A., and PNC Bank, National Association, as the lenders party thereto and Wells Fargo, as Administrative Agent, Collateral Agent, and Swing Line Lender. The ABL Credit Facility will mature in November 2026.

From and after February 4, 2025 and on the first day of each fiscal quarter thereafter, based on the amount of our average daily excess availability under the facility, borrowings outstanding under the ABL Credit Facility bear interest, at our option, at:

(i)the prime rate per annum, plus a margin of 1.750% or 2.000%; or

(ii)the Secured Overnight Financing Rate (“SOFR”) per annum, plus 0.100%, plus a margin of 2.750% or 3.000%.

As of April 18, 2024, based on the size of the unused portion of the commitments, we are charged a fee ranging from 0.250% to 0.375%.

As of February 4, 2025, letter of credit fees range from 1.000% to 1.125% for commercial letters of credit and range from 1.500% to 1.750% for standby letters of credit. These fees are determined based on the amount of our average daily excess availability under the facility. The amount available for loans and letters of credit under the ABL Credit Facility is determined by a borrowing base consisting of certain credit card receivables, certain trade receivables, certain inventory, and the fair market value of certain real estate, subject to certain reserves and an availability block.

As of April 18, 2024, credit extended under the ABL Credit Facility is secured by a first priority security interest in substantially all of our U.S. and Canadian assets, including our intellectual property, certain furniture, fixtures, equipment, and pledges of subsidiary capital stock.

The outstanding obligations under the ABL Credit Facility may be accelerated upon the occurrence of certain customary events of default, as described below. We are not subject to any early termination fees.

The ABL Credit Facility contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments. These covenants also limit our ability and our subsidiaries’ ability to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, or dispositions or to change the nature of our business. Pursuant to the Seventh Amendment, the requisite payment condition thresholds for some of these covenants have been heightened, resulting in certain actions such as the repurchase of shares and payment of cash dividends becoming more difficult to perform. Additionally, if we are unable to maintain a certain amount of excess availability for borrowings (the “excess availability threshold”), we may be subject to cash dominion.

The tables below present the components of our ABL Credit Facility:


	August 2, 2025		February 1, 2025		August 3, 2024
	(in millions)
Total borrowing base availability	$	356.4	$	301.9	$	396.2
Credit facility availability	433.0		433.0		433.0
Maximum borrowing availability (1)	356.4		301.9		396.2

Outstanding borrowings	294.4		245.7		316.7

Letters of credit outstanding—standby	18.2		16.0		12.2
Utilization of credit facility at end of period	312.6		261.7		328.9

Availability (2)	$	43.8	$	40.2	$	67.3

Interest rate at end of period	7.6%		7.6%		8.6%


Average end-of-day loan balance during the period	$	261.7	$	284.5	$	252.7
Highest end-of-day loan balance during the period	$	302.3	$	366.9	$	328.0

Average interest rate	7.7%		8.7%		9.3%

____________________________________________

(1)The lower of the credit facility availability and the total borrowing base availability.

(2)The sub-limit availability for letters of credit was $6.8 million as of August 2, 2025, $9.0 million at February 1, 2025, and $12.8 million as of August 3, 2024.

Mithaq Term Loans

Mithaq is a controlling stockholder of the Company. The Company and certain subsidiaries maintain the interest-free, unsecured and subordinated promissory note for a $78.6 million Initial Mithaq Term Loan, dated February 29, 2024, by and among us, certain of our subsidiaries, and Mithaq. During the first quarter of Fiscal 2025, $60.2 million under the Initial Mithaq Term Loan was repaid pursuant to the completion of our rights offering on February 6, 2025 (“Rights Offering”), leaving $18.4 million outstanding under the Initial Mithaq Term Loan as of August 2, 2025.

The Initial Mithaq Term Loan matures on February 15, 2027 and is guaranteed by each of our subsidiaries that guarantee our ABL Credit Facility.

The Company and certain subsidiaries also maintain the unsecured and subordinated promissory note for a $90.0 million New Mithaq Term Loan, dated April 16, 2024, by and among us, certain of our subsidiaries, and Mithaq.

The New Mithaq Term Loan matures on April 16, 2027, and requires monthly payments equivalent to interest charged at the SOFR plus 4.000% per annum, with the first year’s monthly payments to Mithaq deferred until April 30, 2025. On April 28, 2025, the Company and Mithaq entered into Amendment No. 1 to the New Mithaq Term Loan promissory note, which subjected these deferred monthly payments due as of April 30, 2025 to a payment plan, payable in installments prior to the end of Fiscal 2025. The amendment was evaluated under FASB ASC 470 — Debt, and accounted for as a debt modification. The New Mithaq Term Loan is guaranteed by each of our subsidiaries that guarantee our ABL Credit Facility. For the Second Quarter 2025 and Year-To-Date 2025, the Company recognized $1.9 million and $3.7 million, respectively, in interest-equivalent expense related to the New Mithaq Term Loan. For the Second Quarter 2024 and Year-To-Date 2024, the Company recognized $2.1 million and $2.5 million, respectively, in interest-equivalent expense related to the New Mithaq Term Loan.

The Mithaq Term Loans are subject to an amended and restated subordination agreement (as amended from time to time, the “Subordination Agreement”), dated as of April 16, 2024, by and among the Company and certain subsidiaries, Wells Fargo and Mithaq, pursuant to which the Mithaq Term Loans are subordinated in payment priority to our obligations and our subsidiaries’ obligations under the Credit Agreement. Subject to such subordination terms, the Mithaq Term Loans are prepayable at any time and from time to time without penalty and do not require any mandatory prepayments.

The Mithaq Term Loans contain customary affirmative and negative covenants substantially similar to a subset of the covenants set forth in the Credit Agreement, including limits on our ability and our subsidiaries’ ability to incur certain liens, to incur certain indebtedness, to make certain investments, acquisitions, dispositions or restricted payments, or to change the nature of our business. The Mithaq Term Loans, however, do not provide for any closing, prepayment or exit fees, or other fees typical for transactions of this nature, do not impose additional reserves on borrowings under the Credit Agreement, and do not contain certain other restrictive covenants.

Maturities of our principal debt payments on the Mithaq Term Loans as of August 2, 2025 are as follows:


	August 2, 2025
	(in thousands)
Remainder of 2025	$	—
2026	—
2027	108,400

Thereafter	—
Total related party debt	$	108,400

Mithaq Commitment Letter

On May 2, 2024, we entered into a commitment letter (the “Commitment Letter”) with Mithaq for a $40.0 million Mithaq Credit Facility. Under the Mithaq Credit Facility, we had the ability to request for advances at any time prior to July 1, 2025. On September 10, 2024, we entered into an Amendment No. 1 to the Commitment Letter with Mithaq, that extended the deadline for requesting advances until July 1, 2026. On September 4, 2025, the Company and Mithaq entered into an Amendment No. 2 to the Commitment Letter, that further extended the deadline for requesting advances until July 1, 2027.

If any debt is incurred under the Mithaq Credit Facility, it shall require monthly payments equivalent to interest charged at the SOFR plus 5.000% per annum. Such debt shall be unsecured and shall be guaranteed by each of our subsidiaries that guarantee our ABL Credit Facility. Similar to the Mithaq Term Loans, such debt shall also be subject to the Subordination Agreement, contain customary affirmative and negative covenants substantially similar to a subset of the covenants set forth in the Credit Agreement, and contain certain customary events of default. Additionally, such debt shall require no mandatory prepayments and shall mature no earlier than July 1, 2027. As of August 2, 2025, no debt had been incurred under the Mithaq Credit Facility.

SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

We describe our significant accounting policies in “Note 1. Basis of Preparation and Summary of Significant Accounting Policies” of the consolidated financial statements included in our most recent Annual Report on Form 10-K for the fiscal year ended February 1, 2025. There have been no significant changes in our accounting policies from those described in our most recent Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the amounts of revenues and expenses reported during the period. We continuously review the appropriateness of the estimates used in preparing our financial statements; however, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information. Consequently, actual results could differ materially from our estimates.

Our critical accounting estimates are described under the heading “Critical Accounting Estimates” in Item 7 of our most recent Annual Report on Form 10-K for the fiscal year ended February 1, 2025. Our critical accounting estimates include impairment of long-lived assets, impairment of indefinite-lived intangible assets, income taxes, stock-based compensation, and inventory valuation. There have been no material changes in these critical accounting estimates from those described in our most recent Annual Report on Form 10-K.

Recent Accounting Standards Updates

Refer to “Note 1. Basis of Presentation” of the accompanying consolidated financial statements for discussion regarding the impact of recently issued accounting standards on our consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

In the normal course of business, our financial position and results of operations are routinely subject to market risk associated with interest rate movements on borrowings and investments and currency rate movements on non-U.S. dollar denominated assets, liabilities, income, and expenses. We utilize cash from operations and short-term borrowings to fund our working capital and investment needs.

Cash and Cash Equivalents

Cash and cash equivalents are normally invested in short-term financial instruments that will be used in operations within 90 days of the balance sheet date. Because of the short-term nature of these instruments, changes in interest rates would not materially affect their fair values.

Interest Rates

On the first day of each fiscal quarter, based on the amount of our average daily excess availability under the ABL Credit Facility, borrowings outstanding under the facility bear interest, at our option, at (i) the prime rate per annum, plus a margin of 1.750% or 2.000%; or (ii) the SOFR per annum, plus 0.100%, plus a margin of 2.750% or 3.000%. As of August 2, 2025, we had $294.4 million in borrowings under our ABL Credit Facility. A 10% change in the prime rate or SOFR would not have had a material impact on our interest expense.

The New Mithaq Term Loan requires monthly payments equivalent to interest charged at the SOFR per annum plus 4.000% per annum, with the first year’s monthly payments to Mithaq deferred until April 30, 2025. On April 28, 2025, the Company and Mithaq entered into Amendment No. 1 to the New Mithaq Term Loan promissory note, which subjected these deferred monthly payments due as of April 30, 2025 to a payment plan, payable in installments prior to the end of Fiscal 2025. A 10% change in the prime rate or SOFR would not have had a material impact on our interest expense.

As of August 2, 2025, we had no borrowings under our Mithaq Credit Facility. If any debt is incurred under the Mithaq Credit Facility, it shall require monthly payments equivalent to interest charged at the SOFR plus 5.000% per annum.

Assets and Liabilities of Foreign Subsidiaries

Assets and liabilities outside the United States are primarily located in Canada and Hong Kong, where our investments in our subsidiaries are considered long-term. As of August 2, 2025, net liabilities in Canada and Hong Kong amounted to $16.0 million. A 10% increase or decrease in the Canadian and Hong Kong foreign currency exchange rates would increase or decrease the corresponding net investment by $1.6 million. All changes in the net investments in our foreign subsidiaries are recorded in other comprehensive loss.

As of August 2, 2025, we had $3.5 million of our cash and cash equivalents held in foreign subsidiaries, of which $1.0 million was in India, $0.7 million was in China, $0.6 million was in Canada, $0.6 million was in Mauritius, $0.5 million was in Hong Kong, and $0.1 million was held in other foreign countries.

We have subsidiaries whose operating results are based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars. The table below summarizes the average translation rates that most significantly impact our operating results:


	Thirteen Weeks Ended		Twenty-six Weeks Ended
	August 2, 2025	August 3, 2024	August 2, 2025	August 3, 2024
Average Translation Rates (1)
Canadian dollar	0.7279	0.7287	0.7164	0.7327
Hong Kong dollar	0.1276	0.1281	0.1281	0.1279

____________________________________________

(1)The average translation rates are the average of the monthly translation rates used during each fiscal year to translate the respective income statements. Each rate represents the U.S. dollar equivalent of the respective foreign currency.

Foreign Operations

We have exchange rate exposure primarily with respect to certain revenues and expenses denominated in Canadian and Hong Kong dollars. As a result, fluctuations in exchange rates impact the amount of our reported sales and expenses. Assuming a 10% change in foreign currency exchange rates, the Second Quarter 2025 net sales would have decreased or increased by approximately $4.1 million, and total costs and expenses would have decreased or increased by approximately $4.1 million. Additionally, we have foreign currency denominated receivables and payables that, when settled, result in transaction gains or losses. A 10% change in foreign currency exchange rates would not result in a significant transaction gain or loss in earnings.

We import a vast majority of our merchandise from foreign countries, primarily Vietnam, Bangladesh, India, Indonesia, Ethiopia, Kenya, Cambodia, and China. Consequently, any significant or sudden change in the political, foreign trade, financial, banking, currency policies and practices, or the occurrence of significant labor unrest in these countries or changes in foreign policies of the United States, could have a material adverse impact on our business, financial position, results of operations, and cash flows.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed only to provide “reasonable assurance” that the controls and procedures will meet their objectives. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

Management, including our President and Interim Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of August 2, 2025.

Based on that evaluation, our President and Interim Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures were effective at the reasonable assurance level, as of August 2, 2025, to ensure that all information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our principal executive, principal accounting, and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(f) and 15d-15(f) of the Exchange Act that occurred during the quarter ended August 2, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS.

Certain legal proceedings in which we are involved are discussed in “Note 7. Commitments and Contingencies” to the accompanying consolidated financial statements and Part I, Item 3 of our Annual Report on Form 10-K for the year ended February 1, 2025.

ITEM 1A.RISK FACTORS.

There were no material changes to the risk factors disclosed in Item 1A of Part I in our Annual Report on Form 10-K for the year ended February 1, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In November 2021, our Board of Directors authorized a $250.0 million share repurchase program (the “Share Repurchase Program”). Under this program, we may repurchase shares on the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, and other market and business conditions. We may suspend or discontinue the program at any time and may thereafter reinstitute purchases, all without prior announcement. Currently, given the terms of our credit agreement, dated as of May 9, 2019, (as amended from time to time, the “Credit Agreement”), by and among the Company and certain subsidiaries, and the lenders party thereto, as amended by the seventh amendment to the Credit Agreement, dated as of April 18, 2024, the repurchase of any shares would require fulfilling the heightened payment conditions under our Credit Agreement, except that repurchases of shares as described below, pursuant to our practice as a result of our insider trading policy, are expressly permitted. As of August 2, 2025, there was $156.1 million remaining availability under the Share Repurchase Program.

Pursuant to our practice, including due to restrictions imposed by our insider trading policy during black-out periods, we withhold and repurchase shares of vesting stock awards and make payments to taxing authorities as required by law to satisfy the withholding tax requirements of all equity award recipients. Our payment of the withholding taxes in exchange for the surrendered shares constitutes a repurchase of our common stock. We also acquire shares of our common stock in conjunction with liabilities owed under our deferred compensation plan, which are held in treasury.

The following table provides a month-by-month summary of our share repurchase activity during the Second Quarter 2025:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value (in thousands) of Shares that May Yet Be Purchased Under the Plans or Programs
May 4, 2025 through May 31, 2025	56,280	$	6.00	337,421	$	156,127
June 1, 2025 through July 5, 2025	—	—		—	156,127
July 6, 2025 through August 2, 2025	—	—		—	156,127
Total	56,280	$	6.00	337,421

____________________________________________

(1)Includes 56,280 shares withheld to cover taxes in conjunction with the vesting of stock awards.

ITEM 5. OTHER INFORMATION.

During the Second Quarter 2025, none of the Company’s directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K of the Exchange Act.

ITEM 6. EXHIBITS.

The following exhibits are filed with this Quarterly Report on Form 10-Q:



10.2 (+)						Amendment No. 2 to Commitment Letter for $40 Million Senior Unsecured Credit Facility, dated as of September 4, 2025, among the Company, certain subsidiaries of the Company, and Mithaq Capital.
10.3 (+)(*)						Form of Deferred Cash Award Agreement under the 2011 Equity Incentive Plan (Group Vice President & above).
10.4 (+)(*)						Form of Performance-Based Cash Award Agreement under the 2011 Equity Incentive Plan (Group Vice President & above).
10.5 (+)(*)						Form of Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (Group Vice President & above).
31.1(+)						Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2(+)						Certificate of Principal Financial Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32(+)						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						Inline XBRL Instance Document.
101.SCH*						Inline XBRL Taxonomy Extension Schema.
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase.
104*						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

____________________________________________

(*) Compensation Arrangement.

(+) Filed herewith.

*Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

zzzzzzzzzzzzzzzzzzSIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		THE CHILDREN’S PLACE, INC.


Date:	September 5, 2025	By:	/S/ Muhammad Umair
			Muhammad Umair
			President and Interim Chief Executive Officer
			(Principal Executive Officer)


Date:	September 5, 2025	By:	/S/ John Szczepanski
			John Szczepanski
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

EX-10.2 2 plce-ex102x822025.htm EX-10.2 Document

EXHIBIT 10.2

MITHAQ CAPITAL SPC

Synergy, Suite 22, 3269 Anas Ibn Malik Rd,

Al Malqa, Riyadh 13521

as of September 4, 2025

CONFIDENTIAL

The Children’s Place, Inc., a Delaware corporation

500 Plaza Drive
Secaucus, New Jersey 07094

Attention: Jared Shure

Email: jshure@childrensplace.com

Amendment No. 2 to Commitment Letter

$40 Million Senior Unsecured Credit Facility (Third)

Ladies and Gentlemen:

WHEREAS, you have advised Mithaq Capital SPC (individually or together with one or more of its affiliates, “Mithaq Capital”, “us” or “we”) that The Children’s Place, Inc., a Delaware corporation (the “Borrower” or “you”), and its subsidiaries (collectively, the “Borrower Parties”), seek to amend the terms of the commitment letter, dated as of May 2, 2024 (as amended from time to time, the “Commitment Letter”; and together with the Mithaq Third Promissory Note and all other documents and agreements executed and delivered in connection therewith, collectively, the “Mithaq Third Credit Documents”), with respect to the senior unsecured credit facility (the “Mithaq Third Credit Facility”) of up to $40 million to be provided to the Borrower Parties upon and subject to the terms and conditions set forth therein and in the other Mithaq Third Credit Documents.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Definitions. All capitalized terms used herein and not otherwise defined in this amendment letter (“Amendment No. 2”) shall have the same meaning herein as in the Mithaq Third Credit Documents.

2.Amendments to Commitment Letter. As of the date of this Amendment No. 2 (the “Amendment Effective Date”), the Commitment Letter is amended as follows:

(a)All instances of the date “July 1, 2026” in the Commitment Letter shall be deleted in their entirety, and be replaced with “July 1, 2027”.

3.Miscellaneous.

(a)This Amendment No. 2 and the other Mithaq Third Credit Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

EXHIBIT 10.2

(b)This Amendment No. 2 shall be governed by, and construed in accordance with, the laws of the State of New York.

(c)This Amendment No. 2 may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. In proving this Amendment No. 2, it shall not be necessary to produce or account for more than one such counterpart signed by the party against which enforcement is sought. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of an executed counterpart of this Amendment No. 2 by telecopier, facsimile or other electronic means (including, via electronic mail in .pdf format) shall be as effective as delivery of a manually executed counterpart thereof.

(d)No provision of this Amendment No. 2 may be waived, amended, supplemented or otherwise modified, or any departure therefrom consented to, except pursuant to an agreement or agreements in writing entered into by, between or among each of the parties hereto.

(e)This Amendment No. 2 and the obligations hereunder may not be assigned by any party hereto without the prior written consent of each other party hereto (and any purported assignment without such consent will be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto.

(f)If any provision of this Amendment No. 2 is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Amendment No. 2 shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[Signature pages follow]

IN WITNESS WHEREOF, the parties have hereunto caused this Amendment No. 2 to be duly executed as of the Amendment Effective Date.

Sincerely,


MITHAQ CAPITAL SPC
By:
			Name:
			Title:

[Signature Page to Amendment No. 2 to Commitment Letter (Mithaq Third Credit Facility)]

EXHIBIT 10.2

Agreed to and accepted as of

the date first above written:


THE CHILDREN’S PLACE, INC., for itself and on behalf of the Borrower Parties
By:
			Name:
			Title:

[Signature Page to Amendment No. 2 to Commitment Letter (Mithaq Third Credit Facility)]

EX-10.3 3 plce-ex103x822025.htm EX-10.3 Document

EXHIBIT 10.3

2025 DEFERRED CASH AWARD AGREEMENT

THE CHILDREN’S PLACE, INC.

[----], 2025

The Children’s Place, Inc. (the “Company”) is offering you a deferred cash award to reward your continued future service with the Company, subject to the terms and conditions set forth in this award agreement (this “Agreement”).

1.Establishment of Award. As described in further detail below, you will be eligible to receive cash in the aggregate amount of $[------] (the “Award”), payable in three substantially equal installments. Subject to your continued employment with the Company through each applicable date in the chart below (each, a “Vesting Date”), you will be entitled to receive the applicable installment portion of the Award set forth in the chart below (each, an “Installment Payment”).


Vesting Date			Installment Payment Amount
May 29, 2026			33.33%
May 28, 2027			33.33%
May 26, 2028			33.34%

Subject to Section 2 (Termination and Change in Control) and the other terms and conditions of this Agreement, each Installment Payment will be payable in cash as soon as practicable (but not later than fifteen (15) days) following the applicable Vesting Date. For the avoidance of doubt, the payment of the Award is in addition to any other compensation to which you may otherwise be entitled in respect of your service to the Company.

2.Termination and Change in Control. (a) Except as provided in Sections 2(b) and 2(c) of this Agreement, if your employment with the Company terminates for any reason, your right to receive any unpaid Installment Payments of the Award will be immediately forfeited, unless otherwise specifically provided by the Board of Directors of the Company (the “Board”) or the Human Capital and Compensation Committee (the “Committee”), as applicable. For purposes of this Agreement, you will not be considered to have incurred a termination of employment with the Company, unless your employment has terminated from the Company and each of its subsidiaries and Affiliates, as determined by the Board or the Committee, as applicable.

(b) Notwithstanding any provision herein to the contrary, in the event that an Involuntary Termination Event occurs within one (1) year following the occurrence of a Change in Control, the outstanding unpaid Installment Payments of the Award shall immediately become fully vested and be immediately paid to you in cash as soon as practicable (but not later than fifteen (15) days) following the Involuntary Termination Event.

(c) Notwithstanding any provision herein to the contrary, the unpaid Installment Payments of the Award shall immediately vest upon your death, Disability or Retirement while in the employ of the Company or its subsidiaries, and the outstanding unpaid Installment Payments of the Award shall be paid to you (or your estate, as applicable) in cash as soon as practicable (but not later than fifteen (15) days) following such event.

(d) For purposes of this Agreement, the terms (1) “Involuntary Termination Event” shall mean (i) the involuntary termination of your employment with the Company or any of its subsidiaries (other than for Cause, death or Disability) or (ii) your resignation of employment with the Company or any of its subsidiaries for Good Reason and (2) “Good Reason” shall mean the occurrence of any of the following without your prior written consent: (i) a material reduction in your then current base salary or target bonus percentage, (ii) a material diminution of your duties or responsibilities, (iii) the assignment to you of duties or responsibilities which are materially inconsistent with your previous duties or responsibilities, or (iv) relocation of your principal work location to a location more than thirty (30) miles from your previous principal work location; provided, however, that no such occurrence shall constitute Good Reason unless you provide the Company with written notice of the matter within thirty (30) days after you first have knowledge of the matter and, in the case of clauses (i), (ii) or (iii) of the definition of “Good Reason” hereof, the Company fails to cure such matter within thirty (30) days after its receipt of such notice, and if the Company fails to cure such matter, you resign within thirty (30) days following the expiration of the cure period.

(e) For purposes of this Agreement, the terms “Cause”, “Disability” and “Retirement” shall have the meanings given such terms under the Company’s Fourth Amended and Restated 2011 Equity Incentive Plan (the “Plan”).

(f) For purposes of this Agreement, and for all purposes of the Award, notwithstanding the definition of Change in Control set forth in the Plan, “Change in Control” shall mean the following:

(ii) individuals who, during any consecutive 12-month period from or after the date hereof, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, that any person becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

(iii) the approval by the stockholders of the Company of a plan of complete dissolution or liquidation of the Company; or

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) (on a fully diluted basis) of either (A) the then outstanding shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”) taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Agreement, the following acquisitions shall not constitute a Change in Control: (I) any acquisition by the Company, (II) any acquisition by any employee benefit plan sponsored or maintained by the Company, (III) any acquisition by an underwriter temporarily holding securities pursuant to an offering of such securities, (IV) any acquisition by an entity owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company or (V) any acquisition by Mithaq Capital SPC, Mithaq Holding Company or any person or entity that, directly or indirectly, controls, is controlled by or is under common control with Mithaq Capital SPC or Mithaq Holding Company (collectively, “Mithaq”); provided that the provisions of this subsection (i) are not intended to apply to or include as a Change in Control any transaction that is specifically excepted from the definition of Change in Control under subsection (iv) below; (iv) the consummation of a reorganization, recapitalization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company other than any transaction with Mithaq (a “Business Combination”), or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an Affiliate of the Company and is not Mithaq (a “Sale”), that in each case requires the approval of the Company’s stockholders (whether for such Business Combination or Sale or the issuance of securities in such Business Combination or Sale), unless immediately following such Business Combination or Sale: (A) more than fifty percent (50%) of the total voting power of (x) the entity resulting from such Business Combination or the entity which has acquired all or substantially all of the business or assets of the Company in a Sale (in either case, the “Surviving Company”), or (y) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the board of directors (or the analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination or Sale, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company or Mithaq), is or becomes the beneficial owner, directly or indirectly, of more than fifty percent (50%) of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination or Sale were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination or Sale.

Terms used in the foregoing definition of “Change in Control” but not defined therein shall have the meanings set forth in the Plan.

3.Taxes. The Company shall withhold from all amounts payable under this Agreement all federal, state and local and other taxes that are required to be withheld pursuant to any applicable laws and regulations. It is intended that the Award be taxed as compensation at ordinary income rates. This Agreement and the Award shall be governed by, and construed in accordance with, Section 15(u) of the Plan relating to Section 409A of the Internal Revenue Code of 1986, as amended. Notwithstanding the foregoing, neither the Company nor any of its subsidiaries or Affiliates will have any obligation to indemnify or otherwise hold you (or any beneficiary) harmless from any or all of such taxes or penalties.

4.Administration. The Board or the Committee, as applicable, will have the sole discretion and authority to administer and interpret this Agreement. The decisions of the Board or the Committee, as applicable, will be final, binding and conclusive on you and the Company.

5.Clawback/Forfeiture. You acknowledge and agree to abide by the terms of the Company’s Clawback Policy, as in effect from time to time (the “Clawback Policy”), in respect of all compensation that you receive from the Company or any of its Affiliates, whether pursuant to this Agreement, the Plan, the Company’s annual bonus plan or otherwise to the extent set forth in the Clawback Policy (collectively, “Covered Compensation”), and you further agree that, in the event that any Covered Compensation previously paid to you is subject to recovery pursuant to the Clawback Policy, you hereby consent to recovery by the Company through any means determined by the Company in its sole discretion, including through withholding by the Company or any of its Affiliates of your salary, wages or any other cash or equity-based compensation payable to you by the Company or any of its Affiliates. Furthermore, to the extent required by applicable law (including without limitation Section 304 of the Sarbanes-Oxley Act of 2002 and Section 954 of the Dodd Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of NASDAQ or other securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Company, your Award shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements will be deemed incorporated by reference into this Agreement).

6.Notices. Notices or communications to be made hereunder shall be in writing and shall be delivered in person, by electronic mail, by registered mail, by confirmed facsimile or by a reputable overnight courier service to the Company at its principal office or to you at your address and/or email address, as applicable, as contained in the records of the Company.

7.Awardee Representations. You have reviewed with your own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. You are relying solely on such advisors and not on any statements or representations of the Company or any of its agents, if any, made to you. You understand that you shall be responsible for your own tax liability arising as a result of the transactions contemplated by this Agreement.

8.At-Will Relationship/Other Arrangements. You acknowledge that this Agreement is not intended to constitute a contract of employment and that your employment is an at-will relationship that has no specific duration. Neither this Agreement nor the payment of any amounts hereunder nor any action of the Company, or the Board or the Committee, as applicable, with respect to this Agreement will be held or construed to confer upon you any legal right to continue being in the employ of the Company or to receive any particular rate of cash or other compensation. You further acknowledge that either the Company or you may terminate your employment at any time, with or without reason, and with or without notice (subject to the requirements of any separate employment or similar agreement between you and the Company). No payment under this Agreement will be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company, except as expressly required otherwise by law or the terms of such plan. The terms and definitions under this Agreement will govern the terms and conditions of the Award in all respects, notwithstanding anything to the contrary contained in any employment or other agreement between you and the Company or any of its Affiliates or subsidiaries. This Agreement will not affect the ability of the Company to establish, adopt or enter into any other Company plan, program or policy.

9.Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to the subject matter of this Agreement. Notwithstanding the foregoing, this Agreement and the payment of the Award shall be subject to the terms of the Plan. In the event of a conflict between this Agreement and the Plan, the terms and conditions of the Plan shall control.

10.Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Board or the Committee, as applicable, from time to time pursuant to the Plan. The Board or the Committee, as applicable, shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon you and your legal representative in respect of any questions arising under the Plan or this Agreement. By signing this Agreement, you acknowledge that you have had an opportunity to review the Plan and agree to be bound by all the terms and provisions of the Plan (and this Agreement).

11.Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.

12.Miscellaneous. This Agreement shall be binding upon and inure to the benefit of the Company and you, and each party’s respective permitted successors, assigns, heirs, beneficiaries and representatives. This Agreement is personal to you and may not be assigned by you without the prior written consent of the Company. Any attempted assignment in violation of this Section shall be null and void. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. This Agreement may be amended or modified only as provided in Section 14 of the Plan or by a written instrument executed by both the Company and you. The Company will not be required to fund or otherwise segregate any cash or any other assets for payment of obligations under this Agreement. This Agreement will constitute an “unfunded” arrangement of the Company. Your rights to payment hereunder will be limited to those of a general unsecured creditor of the Company. Except as expressly provided by the Board or the Committee, as applicable, no right hereunder will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by you, and any such attempted action by you will be void. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder and shall not be terminated by either party without the express written consent of both parties.

* * * * *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused their duly authorized officer to execute this Agreement as of the date first written above.

THE CHILDREN’S PLACE, INC.

By: _______________________________________________

Name: Jared E. Shure
Title: Chief Administrative Officer, General Counsel & Secretary

AWARDEE

By: _______________________________________________

Name:

Date:__________________________________________

EX-10.4 4 plce-ex104x822025.htm EX-10.4 Document

EXHIBIT 10.4

All GVPs and above 2025

2025 PERFORMANCE-BASED CASH AWARD AGREEMENT

THE CHILDREN’S PLACE, INC.

July [--], 2025

The Children’s Place, Inc. (the “Company”) is offering you a performance-based cash award to reward your continued future service with the Company, subject to the terms and conditions set forth in this award agreement (this “Agreement”).

1.Establishment of Award. Subject to the terms and conditions set forth in this Agreement, and as otherwise provided in the Company’s Fourth Amended and Restated 2011 Equity Incentive Plan (the “Plan”), you will be eligible to receive a performance-based cash award (the “Award”) in April 2028, no later than April 13, 2028 (such date, the “Vesting Date”); provided, however, that the Award shall not be so delivered unless (a) you are in the employ of the Company or its subsidiaries on the Vesting Date, subject to Section 2 (Termination and Change in Control) and the other terms and conditions of this Agreement; and (b) a determination has been made by the Board of Directors of the Company (the “Board”) or the Human Capital and Compensation Committee (the “Committee”), as applicable, that the Adjusted Free Cash Flow target for the Performance Period set forth in Exhibit B has been achieved, and at what levels that target has been achieved (by reference to Exhibit B) (a “Determination”). The maximum amount of the Award that may be earned through the Vesting Date is set forth in Exhibit A to this Agreement. For the avoidance of doubt, the payment of the Award is in addition to any other compensation to which you may otherwise be entitled in respect of your service to the Company.

2.Termination and Change in Control. (a) Except as provided in Sections 2(b) and 2(c) of this Agreement, if your employment with the Company terminates for any reason, your right to receive the payment of the Award will be immediately forfeited, unless otherwise specifically provided otherwise by the Board or the Committee, as applicable. For purposes of this Agreement, you will not be considered to have incurred a termination of employment with the Company, unless your employment has terminated from the Company and each of its subsidiaries and Affiliates, as determined by the Board or the Committee, as applicable.

(b) Notwithstanding any provision herein to the contrary,

(i) if a Change in Control occurs prior to a Determination, then immediately prior to such Change in Control, the Award shall immediately vest at the “Target” level as set forth in Exhibit B to this Agreement and be immediately delivered to you on the Vesting Date (without regard to the achievement of the Adjusted Free Cash Flow target set forth on Exhibit B), provided that you are in the employ of the Company or its subsidiaries on the Vesting Date;

(ii) in the event that an Involuntary Termination Event occurs within one (1) year following the occurrence of a Change in Control, the Award shall immediately vest at the “Target” level as set forth in Exhibit B to this Agreement and be promptly delivered to you as soon as practicable (but not later than fifteen (15) days) following the Involuntary Termination Event; and

(iii) in the event that after a Determination, a Change in Control and an Involuntary Termination Event occur, then the Award shall immediately vest at the level as determined by the

Board or the Committee, as applicable, and shall be promptly delivered to you as soon as practicable (but not later than fifteen (15) days) following the Involuntary Termination Event.

(c) Notwithstanding any provision herein to the contrary, in the event that your employment with the Company and/or its subsidiaries terminates due to your death, Disability or Retirement, with respect to the Award, (x) prior to a Determination, then the performance target in Exhibit B shall be deemed to have been achieved at target, and the conditions set forth in Exhibit B shall be deemed to have been satisfied, and, therefore, the Award (as set forth in Exhibit B) shall immediately become fully vested at the “Target” level and be promptly delivered to you (or your estate, as applicable) within fifteen (15) days following the date of such termination of employment (subject to Section 15(u)(ii) of the Plan); provided that if such termination of employment occurs on or prior to the date on which 50% of the Performance Period (as set forth in Exhibit B) has elapsed, only fifty percent (50%) of the Award at the “Target” level shall immediately become vested and be so delivered or (y) after a Determination, then the Award that has been determined to have been earned by you in accordance with Exhibit B shall, to the extent not previously delivered to you, shall immediately become vested and be promptly delivered to you (or your estate, as applicable) within fifteen (15) days following the date of such termination of employment (subject to Section 15(u)(ii) of the Plan).

(e) For purposes of this Agreement, the terms “Cause”, “Disability” and “Retirement” shall have the meanings given such terms under the Plan.

(f) For purposes of this Agreement, and for all purposes of the Award, notwithstanding the definition of Change in Control set forth in the Plan, “Change in Control” shall mean the following:

(iii) the approval by the stockholders of the Company of a plan of complete dissolution or liquidation of the Company; or

(iv) the consummation of a reorganization, recapitalization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company other than any transaction with Mithaq (a “Business Combination”), or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an Affiliate of the Company and is not Mithaq (a “Sale”), that in each case requires the approval of the Company’s stockholders (whether for such Business Combination or Sale or the issuance of securities in such Business Combination or Sale), unless immediately following such Business Combination or Sale: (A) more than fifty percent (50%) of the total voting power of (x) the entity resulting from such Business Combination or the entity which has acquired all or substantially all of the business or assets of the Company in a Sale (in either case, the “Surviving Company”), or (y) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the board of directors (or the analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination or Sale, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company or Mithaq), is or becomes the beneficial owner, directly or indirectly, of more than fifty

percent (50%) of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination or Sale were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination or Sale.

Terms used in the foregoing definition of “Change in Control” but not defined therein shall have the meanings set forth in the Plan.

will constitute an “unfunded” arrangement of the Company. Your rights to payment hereunder will be limited to those of a general unsecured creditor of the Company. Except as expressly provided by the Board or the Committee, as applicable, no right hereunder will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by you, and any such attempted action by you will be void. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder and shall not be terminated by either party without the express written consent of both parties.

* * * * *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused their duly authorized officer to execute this Agreement as of the date first written above.

THE CHILDREN’S PLACE, INC.

By: _______________________________________________

Name: Jared E. Shure
Title: Chief Administrative Officer, General Counsel & Secretary

AWARDEE

By: _____________________________________________

Name:

Date:__________________________________________

Exhibit A

(a) Awardee’s Name:

(b) Award Date: July 3, 2025

(c) Performance Period: The three (3) fiscal years of the Company commencing on February 2, 2025 and ending on January 29, 2028 (“Fiscal Years 2025-2027”)

(d) Target Cash Amount:

(e) Maximum Cash Amount available to be earned: 200% of the Target Cash Amount set forth above

A-1

Exhibit B

Adjusted Free Cash Flow Target

You shall earn the percentage of the Target Cash Amount (as listed on Exhibit A) that is scheduled to vest in April 2028, no later than April 13, 2028, by reference to the Adjusted Free Cash Flow achieved for the three (3) fiscal years of the Company commencing on February 2, 2025 and ending on January 29, 2028 (the “Performance Period”) as set forth in the following table. If the Adjusted Free Cash Flow achieved for the Performance Period falls between the thresholds set forth in the following table, the percentage of the Target Cash Amount to be earned shall be determined by linear interpolation:


Adjusted Free Cash Flow for Performance Period – Fiscal Years 2025-2027			Percentage of the Target Cash Amount Earned
$275,000,000			200%
$225,000,000			175%
$200,000,000			150%
$175,000,000			125%
$150,000,000			100% (Target)
$135,000,000			75%
$120,000,000			50%
$110,000,000			25%
$100,000,000			0%

“Adjusted Free Cash Flow” shall mean the Company’s cash flow from operations minus (i) capital expenditures and/or (ii) other unusual or non-recurring items, each as approved by the Committee.

B-1

EX-10.5 5 plce-ex105x822025.htm EX-10.5 Document

EXHIBIT 10.5

RESTRICTED STOCK UNIT AWARD AGREEMENT

THE CHILDREN’S PLACE, INC.

August 20, 2025

This Restricted Stock Unit Award Agreement (the “Agreement”), effective as of August 20, 2025, is entered into by and between The Children’s Place, Inc., a Delaware corporation (the “Company”), and ____________ (the “Awardee”).

WHEREAS, the Company desires to provide the Awardee an incentive to participate in the success and growth of the Company through the opportunity to earn a proprietary interest in the Company;

WHEREAS, to give effect to the foregoing intentions, the Company desires to grant the Awardee the right to receive shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”), pursuant to Section 9 of the Company’s Fourth Amended and Restated 2011 Equity Incentive Plan (the “Plan”), subject to the terms and conditions set forth herein; and

WHEREAS, capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Plan.

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1.Award. Subject to the terms and conditions set forth in this Agreement, and as otherwise provided in the Plan, the Company shall issue and deliver to the Awardee that number of shares of Common Stock on or within fifteen (15) days following each of the three vesting dates set forth in Exhibit A to this Agreement (each, a “Vesting Date”); provided, however, that the shares of Common Stock deliverable in accordance with the foregoing (the “Deferred Shares”) on or following each Vesting Date shall not be so delivered unless (i) on such respective Vesting Date, the Company has a sufficient number of shares of Common Stock available for issuance under the Plan, and (ii) the Awardee is in the employ of the Company or its subsidiaries on such respective Vesting Date. The Company anticipates that its shareholders shall approve an increase in the number of shares available for issuance under the Plan at the Company’s upcoming annual meeting in May 2026, in order to ensure the Company can satisfy the foregoing clause 1(i) for all Vesting Dates. The total number of Deferred Shares that may be earned if the Awardee remains employed by the Company or its subsidiaries through the final Vesting Date is set forth in Exhibit A to this Agreement. For the avoidance of doubt, the award of the Deferred Shares on each Vesting Date is in addition to any other compensation to which the Awardee may otherwise be entitled in respect of the Awardee’s service to the Company.

2.Termination and Change in Control.

(a) Except as provided in Section 2(b) of this Agreement, if the Awardee’s employment with the Company terminates for any reason, the Awardee’s right to receive any unvested Deferred Shares and dividend equivalents otherwise credited pursuant to Section 3 (Dividend Equivalents) below will be immediately forfeited, unless otherwise specifically provided otherwise by the Board of Directors of the Company (the “Board”) or the Human Capital and Compensation Committee (the “Committee”), as applicable. For purposes of this Agreement, the Awardee will not be considered to have incurred a termination of employment with the Company unless the Awardee’s employment has terminated from the Company and each of its subsidiaries and Affiliates, as determined by the Board or the Committee, as applicable.

(b) Notwithstanding any provision herein to the contrary, in the event that an Involuntary Termination Event occurs within one (1) year following the occurrence of a Change in Control, the outstanding unvested Deferred Shares shall immediately become fully vested and be promptly delivered to the Awardee as soon as practicable (but not later than fifteen (15) days) following the Involuntary Termination Event.

(c) Notwithstanding any provision herein to the contrary, the outstanding unvested Deferred Shares shall immediately vest upon the Awardee’s death, Disability or Retirement while in the employ of the Company or its subsidiaries, and such Deferred Shares shall be promptly delivered to the Awardee (or the Awardee’s estate, as applicable) as soon as practicable (but not later than fifteen (15) days) following such event (subject to Section 15(u)(ii) of the Plan).

(d) For purposes of this Agreement, the terms (1) “Involuntary Termination Event” shall mean (i) the involuntary termination of the Awardee’s employment with the Company or any of its subsidiaries (other than for Cause, death or Disability) or (ii) the Awardee’s resignation of employment with the Company or any of its subsidiaries for Good Reason and (2) “Good Reason” shall mean the occurrence of any of the following without the Awardee’s prior written consent: (i) a material reduction in the Awardee’s then current base salary or target bonus percentage, (ii) a material diminution of the Awardee’s duties or responsibilities, (iii) the assignment to the Awardee of duties or responsibilities which are materially inconsistent with the Awardee’s previous duties or responsibilities, or (iv) relocation of the Awardee’s principal work location to a location more than thirty (30) miles from the Awardee’s previous principal work location; provided, however, that no such occurrence shall constitute Good Reason unless the Awardee provides the Company with written notice of the matter within thirty (30) days after the Awardee first has knowledge of the matter and, in the case of clauses (i), (ii) or (iii) of the definition of “Good Reason” hereof, the Company fails to cure such matter within thirty (30) days after its receipt of such notice, and if the Company fails to cure such matter, the Awardee resigns within thirty (30) days following the expiration of the cure period.

(e) For purposes of this Agreement, the terms “Cause”, “Disability” and “Retirement” shall have the meanings given such terms under the Plan.

(f) For purposes of this Agreement, and for all purposes of any award of Deferred Shares, notwithstanding the definition of Change in Control set forth in the Plan, “Change in Control” shall mean the following:

(iii) the approval by the stockholders of the Company of a plan of complete dissolution or liquidation of the Company; or

Terms used in the foregoing definition of “Change in Control” but not defined therein shall have the meanings set forth in the Plan.

3.Dividend Equivalents. The Company shall credit the Awardee in respect of each Deferred Share (and each Dividend Equivalent Share (or fraction thereof)) subject to this Agreement with dividend equivalents in the form of a number of shares of Common Stock (including any fractional shares) (the “Dividend Equivalent Shares”) equal to (i) the amount of each dividend (including extraordinary dividends if so determined by the Board or the Committee, as applicable) declared to other stockholders of the Company in respect of one share of Common Stock divided by (ii) the Fair Market Value of a share of Common Stock on the payment date for the applicable dividend. On the date(s) that Deferred Shares are delivered to the Awardee hereunder (whether pursuant to Sections 1 or 2 above), the Dividend Equivalent Shares in respect of the aggregate number of delivered Deferred Shares shall also be delivered to the Awardee, with the aggregate number of such Dividend Equivalent Shares being rounded down to the nearest whole share (but, in any event, no fewer than one share). No dividend equivalents shall be accrued for the benefit of the Awardee with respect to record dates occurring prior to any Vesting Date, or with respect to record dates occurring on or after the date, if any, on which the Awardee’s rights to receive Deferred Shares are forfeited.

4.Taxes. This Agreement and the award of any Deferred Shares shall be governed by, and construed in accordance with, Section 15(u) of the Plan relating to Section 409A of the Internal Revenue Code of 1986, as amended. Notwithstanding the foregoing, neither the Company nor any of its subsidiaries or Affiliates will have any obligation to indemnify or otherwise hold the Awardee (or any beneficiary) harmless from any or all of such taxes or penalties.

5.Withholding Taxes. Awardee shall be required to pay to the Company or its subsidiary, and the Company or its subsidiary shall have the right (but not the obligation) and is hereby authorized to withhold from amounts payable and/or property deliverable to the Awardee, the amount of any required withholding taxes in respect of the Deferred Shares and the Dividend Equivalent Shares, or any other payment or transfer under this Agreement, and to take such other action as may be necessary in the opinion of the Board or the Committee, as applicable, or the Company to satisfy all obligations for the payment of such withholding taxes.

6.Transfer Restrictions. Prior to delivery of any Common Stock with respect to the Deferred Shares or the Dividend Equivalent Shares, the Awardee shall not be deemed to have any ownership or stockholder rights (including without limitation dividend and voting rights) with respect to such shares, nor may the Awardee sell, assign, pledge or otherwise transfer (voluntarily or involuntarily) this Agreement, or any of the Deferred Shares or any of the Dividend Equivalent Shares prior to delivery thereof.

7.Changes in Capitalization. In the event of (a) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to acquire shares of Common Stock or other securities of the Company, or other similar corporate transaction or event that affects the shares of Common Stock, or (b) unusual or nonrecurring events affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation service, accounting principles or law, such that in any case an amendment to this Agreement is determined by the Board or the Committee, as applicable, in its sole discretion to be necessary or appropriate, then this Agreement shall be amended in such manner as the Board or the Committee, as applicable, may deem equitable in accordance with Section 12 of the Plan.

8.Government Regulations. Notwithstanding anything contained herein to the contrary, the Company’s obligation to issue or deliver the Deferred Shares or any certificates evidencing such shares shall be subject to the terms of all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

9.Administration. The Board or the Committee, as applicable, will have the sole discretion and authority to administer and interpret this Agreement. The decisions of the Board or the Committee, as applicable, will be final, binding and conclusive on the Awardee and the Company.

10.Awardee Representations. The Awardee has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. The Awardee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents, if any, made to the Awardee. The Awardee understands that the Awardee (and, subject to Section 5 (Withholding Taxes) above, not the Company) shall be responsible for the Awardee’s own tax liability arising as a result of the transactions contemplated by this Agreement.

11.Clawback/Forfeiture. The Awardee acknowledges and agrees to abide by the terms of the Company’s Clawback Policy, as in effect from time to time (the “Clawback Policy”), in respect of all compensation that the Awardee receives from the Company or any of its Affiliates, whether pursuant to this Agreement, the Plan, the Company’s annual bonus plan or otherwise to the extent set forth in the Clawback Policy (collectively, “Covered Compensation”), and the Awardee further agrees that, in the event that any Covered Compensation previously paid to the Awardee is subject to recovery pursuant to the Clawback Policy, the Awardee hereby consents to recovery by the Company through any means determined by the Company in its sole discretion, including through withholding by the Company or any of its Affiliates of the Awardee’s salary, wages or any other cash or equity-based compensation payable to the Awardee by the Company or any of its Affiliates. Furthermore, to the extent required by applicable law (including without limitation Section 304 of the Sarbanes-Oxley Act of 2002 and Section 954 of the Dodd Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of NASDAQ or other securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Company, the award of any Deferred Shares shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into this Agreement). In the event that this Section 11 and/or such written policy is deemed to be unenforceable, then the award of Deferred Shares shall be deemed to be unenforceable due to the lack of adequate consideration.

12.Employment. Neither this Agreement nor any action taken hereunder shall be construed as giving the Awardee any right of continuing employment by the Company or its subsidiaries.

13.Notices. Notices or communications to be made hereunder shall be in writing and shall be delivered in person, by electronic mail, by registered mail, by confirmed facsimile or by a reputable overnight courier service to the Company at its principal office or to the Awardee at his or her address and/or email address, as applicable, as contained in the records of the Company.

14.Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.

15.Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings relating to the subject matter of this Agreement. Notwithstanding the foregoing, this Agreement and the award of any Deferred Shares made hereby shall be subject to the terms of the Plan. In the event of a conflict between this Agreement and the Plan, the terms and conditions of the Plan shall control. The Company will not be required to fund or otherwise segregate any cash or any other assets for payment of obligations under this Agreement. This Agreement will constitute an “unfunded” arrangement of the Company. The Awardee’s rights to payment hereunder will be limited to those of a general unsecured creditor of the Company.

16.Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Board or the Committee, as applicable, from time to time pursuant to the Plan. The Board or the Committee, as applicable, shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Awardee and his or her legal representative in respect of any questions arising under the Plan or this Agreement. By signing this Agreement, Awardee acknowledges that he or she has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan (and this Agreement).

17.Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Awardee and their respective permitted successors, assigns, heirs, beneficiaries and representatives. This Agreement is personal to the Awardee and may not be assigned by the Awardee without the prior written consent of the Company. Any attempted assignment in violation of this Section shall be null and void. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect.

18.Amendment. This Agreement may be amended or modified only as provided in Section 14 of the Plan or by a written instrument executed by both the Company and the Awardee.

19.Survivorship. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder and shall not be terminated by either party without the express written consent of both parties.

* * *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused their duly authorized officer to execute this Agreement as of the date first written above.

THE CHILDREN’S PLACE, INC.

By:_____________________________________________
Name: Jared E. Shure
Title: Chief Administrative Officer, General Counsel & Secretary

AWARDEE

By:_____________________________________________
Name:

Date: As of _________, 2025

Exhibit A


Vesting Date			Quantity
May 28, 2027
May 30, 2028
May 25, 2029

EX-31.1 6 plce-ex311x8225.htm EX-31.1 Document

EXHIBIT 31.1

Certificate of Principal Executive Officer pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Muhammad Umair, certify that:

1.I have reviewed this quarterly report on Form 10-Q of The Children’s Place, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	September 5, 2025	By:	/S/ Muhammad Umair
			MUHAMMAD UMAIR
			President and Interim Chief Executive Officer
			(Principal Executive Officer)

EX-31.2 7 plce-ex312x822025.htm EX-31.2 Document

EXHIBIT 31.2

Certificate of Principal Financial Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John Szczepanski, certify that:

1.I have reviewed this quarterly report on Form 10-Q of The Children’s Place, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	September 5, 2025	By:	/S/ John Szczepanski
			JOHN SZCZEPANSKI Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32 8 plce-ex32x822025.htm EX-32 Document

EXHIBIT 32

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002.

I, Muhammad Umair, President and Interim Chief Executive Officer of The Children’s Place, Inc. (the “Company”), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify that to my knowledge:

1.The Quarterly Report of the Company on Form 10-Q for the quarter ended August 2, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in such quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, I have executed this Certification this 5th day of September, 2025.


			By:			/S/ Muhammad Umair
						President and Interim Chief Executive Officer (Principal Executive Officer)

I, John Szczepanski, Chief Financial Officer of The Children’s Place, Inc. (the “Company”), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify that to my knowledge:

1.The Quarterly Report of the Company on Form 10-Q for the quarter ended August 2, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in such quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, I have executed this Certification this 5th day of September, 2025.


			By:			/S/ John Szczepanski
						Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

This certification accompanies the Quarterly Report on Form 10-Q of The Children’s Place, Inc. for the quarter ended August 2, 2025 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original copy of this written statement required by Section 906 of the Sarbanes Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission and its staff upon request.