The Children's Place, Inc.
Company Name | The Children's Place, Inc. |
Stock Symbol | PLCE |
Class Period | March 16, 2023 to February 08, 2024 |
Lead Plaintiff Motion Deadline | April 29, 2024 |
On February 9, 2024, before the market opened, The Children’s Place announced its preliminary fourth quarter fiscal year 2023 financial results. Therein, the Company revealed that it now expected fourth quarter net sales between $454 million and $456 million, falling short of previously issued guidance. The Company also disclosed that it would expect to incur an adjusted operating loss in the fourth quarter in range of (9.0%) to (8.0%) of net sales, which reflected the impact of “lower than expected merchandise margins resulting from more aggressive promotions in an effort to maximize sales, higher than anticipated split shipments to meet customer e-commerce demand, and increased inventory valuation adjustment.”
On this news, the Company’s share price fell $7.25 or 37%, to close at $12.51 per share on February 9, 2024, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was engaged in aggressive promotions; (2) that, as a result, the Company’s inventory values were overstated; (3) that the foregoing was reasonably likely to have an adverse impact on fiscal 2023 financial results; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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