The Children’s Place (PLCE) Allegedly Overstated its Inventory Levels
Robbins LLP informs investors that a shareholder filed a class action on behalf of all those who purchased or otherwise acquired The Children’s Place, Inc. (NYSE: PLCE) securities between March 16, 2023 and February 8, 2024. The Children’s Place is a specialty portfolio of children’s brands. The Company designs, contracts to manufacture, and sells apparel, accessories and footwear, primarily under its proprietary brands: “The Children’s Place,” “Gymboree,” “Sugar & Jade,” and “PJ Place.”
The Allegations
According to the complaint, on February 9, 2024, The Children’s Place announced its preliminary fourth quarter fiscal year 2023 financial results, revealing 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.
Plaintiff alleges that during the class period, 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; and (3) that the foregoing was reasonably likely to have an adverse impact on fiscal 2023 financial results.
What Now: You may be eligible to participate in the class action against The Children’s Place, Inc. Shareholders who want to serve as lead plaintiff for the class must file their papers with the court by April 29, 2024. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
