SEGMENT INFORMATION

In accordance with FASB ASC 280---Segment Reporting, 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. 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, revenue from the Company's Canadian wholesale business and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income 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. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales and the Company has no major customers that account for more than 10% of its net sales. As of July 29, 2017, The Children’s Place U.S. operated 897 stores and The Children’s Place International operated 129 stores. As of July 30, 2016, The Children’s Place U.S. operated 932 stores and The Children’s Place International operated 132 stores.

The following tables provide segment level financial information:



	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 29, 2017			July 30, 2016			July 29, 2017			July 30, 2016
	(In thousands)
Net sales:
The Children’s Place U.S.	$	327,375		$	319,189		$	722,138		$	694,296
The Children’s Place International ⁽¹⁾	46,226			52,227			88,139			96,471
Total net sales	$	373,601		$	371,416		$	810,277		$	790,767
Operating income (loss):
The Children’s Place U.S.	$	(924	)	$	(8,617	)	$	37,816		$	25,537
The Children’s Place International	4,143			5,677			7,687			11,133
Total operating income (loss) ⁽²⁾	$	3,219		$	(2,940	)	$	45,503		$	36,670
Operating income (loss) as a percent of net sales:
The Children’s Place U.S.	(0.3		)%	(2.7		)%	5.2		%	3.7		%
The Children’s Place International	9.0		%	10.9		%	8.7		%	11.5		%
Total operating income (loss)	0.9		%	(0.8		)%	5.6		%	4.6		%
Depreciation and amortization:
The Children’s Place U.S.	$	14,271		$	14,889		$	28,234		$	29,532
The Children’s Place International	1,708			1,002			3,437			2,820
Total depreciation and amortization	$	15,979		$	15,891		$	31,671		$	32,352
Capital expenditures:
The Children’s Place U.S.	$	9,776		$	8,025		$	22,876		$	14,829
The Children’s Place International	88			927			280			1,207
Total capital expenditures	$	9,864		$	8,952		$	23,156		$	16,036

____________________________________________


⁽¹⁾	Net sales from The Children's Place International are primarily derived from revenues from Canadian operations.


⁽²⁾	Includes costs incurred related to asset impairment charges, costs related to foreign exchange control penalties and a sales and use tax audit settlement, and costs arising out of the restructuring of certain store and corporate operations totaling approximately $1.9 million for the Second Quarter 2017.

Includes costs incurred related to a provision for a legal settlement, asset impairment charges, costs related to foreign exchange control penalties and a sales and use tax audit settlement, and costs arising out of the restructuring of certain store and corporate operations totaling approximately $8.0 million during Year-To-Date 2017.

Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $3.0 million and $2.6 million for the Second Quarter 2016 and Year-To-Date 2016, respectively.



	July 29, 2017		January 28, 2017		July 30, 2016
Total assets:	(In thousands)
The Children’s Place U.S.	$	786,038	$	735,953	$	768,831
The Children’s Place International	184,637		174,546		164,706
Total assets	$	970,675	$	910,499	$	933,537