Childrens Place, Inc.PLCE

Childrens Place, Inc. Segments Disclosure

10-KFiled Apr 17, 20254 min read
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 revenue from the Company’s U.S.-based wholesale business. Included in The Children’s Place International segment are the Company’s Canadian-based stores and revenue 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 $170.7 million during Fiscal 2024, and accounts for a majority of the Company’s accounts receivable, amounting to $31.6 million as of February 1, 2025.
Store Count by Segment
As of February 1, 2025, The Children’s Place U.S. had 437 stores and The Children’s Place International had 58 stores. As of February 3, 2024, The Children’s Place U.S. had 460 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:
 Fiscal Year Ended February 1, 2025
 The Children’s Place U.S.
The Children’s Place International (1)
Total
(in thousands)
Net sales$1,266,500$119,769$1,386,269
Cost of sales (2)
836,35190,457926,808
Selling, general, and administrative expenses (3)
405,89539,267445,162
Other segment expenses (4)
28,000—28,000
Segment operating loss$(3,746)$(9,955)$(13,701)
Segment operating loss as a percentage of net sales(0.3)%(8.3)%(1.0)%
 Fiscal Year Ended February 3, 2024
 The Children’s Place U.S.
The Children’s Place International (1)
Total
(in thousands)
Net sales$1,457,352$145,156$1,602,508
Cost of sales (2)
1,058,42398,8111,157,234
Selling, general, and administrative expenses (3)
450,86843,661494,529
Other segment expenses (4)
34,543—34,543
Segment operating income (loss)$(86,482)$2,684$(83,798)
Segment operating income (loss) as a percentage of net sales(5.9)%1.8%(5.2)%
 Fiscal Year Ended January 28, 2023
 The Children’s Place U.S.
The Children’s Place International (1)
Total
(in thousands)
Net sales$1,533,934$174,548$1,708,482
Cost of sales (2)
1,079,241115,0791,194,320
Selling, general, and administrative expenses (3)
460,21852,218512,436
Other segment expenses (4)
3,256—3,256
Segment operating income (loss)$(8,781)$7,251$(1,530)
Segment operating income (loss) as a percentage of net sales(0.6)%4.2%(0.1)%
___________________________________________
(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)Refer to Note 1. Basis of Presentation for additional information on the components of Cost of sales.
(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 loss to Loss before provision (benefit) for income taxes:
 Fiscal Years Ended
February 1,
2025		February 3,
2024		January 28,
2023
(in thousands)
Total segment operating loss$(13,701)$(83,798)$(1,530)
Related party interest expense(6,493)— —
Other interest expense(29,301)(30,087)(13,324)
Interest income47 87 92
Loss before provision (benefit) for income taxes$(49,448)$(113,798)$(14,762)
Additional Segment Data
 Fiscal Years Ended
February 1,
2025		February 3,
2024		January 28,
2023
(in thousands)
Depreciation and amortization:
The Children’s Place U.S.$35,644 $43,428 $47,612
The Children’s Place International3,968 3,758 3,852
Total depreciation and amortization$39,612$47,186$51,464
Capital expenditures:
The Children’s Place U.S.$15,245 $27,462 $44,970
The Children’s Place International585 97 607
Total capital expenditures$15,830$27,559$45,577
February 1,
2025		February 3,
2024
(in thousands)
Total assets:  
The Children’s Place U.S.$711,564 $758,003 
The Children’s Place International35,988 42,305 
Total assets$747,552 $800,308 
 Geographic Information
The Company’s long-lived assets were located in the following countries:
February 1,
2025		February 3,
2024
(in thousands)
Long-lived assets (1):
United States$267,751 $334,425 
Canada9,801 13,382 
Asia1,996 375 
Total long-lived assets$279,548 $348,182 
___________________________________________
(1)The Company long-lived assets are comprised of net Property and equipment, ROU assets, Tradenames, and Other assets.
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About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

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