The stock price of the chain, which operates 961 stores in North America, dived 7.72% to $71.99.
Children's Place reported earnings of 10 cents a share in the second quarter, or $1 million, down from 45 cents and $7.5 million during the same period last year.
The retailer reported a decline in net sales of 6.3% to $420.5 million in the three months ended Aug. 3, from $448.7 million a year ago.
Comparable-store sales were down 3.8%, compared to a 13.8% increase in the second quarter of 2018.
In a press statement, CEO Jane Elfers said integration of the bankrupt Gymboree chain, which Children's Place acquired for $76 million earlier this year, along with rights to the Crazy 8 brand, weighed on the latest quarterly results.
Elfers said the relaunch of Gymboree's website had generated strong interest among customers, with plans for a wider rollout of the revamped brand in the spring of 2020.
"Sales for the quarter met our expectations, however traffic remained weaker than anticipated which led to a late quarter increase in promotional activity across the sector," Elfers said. "Although we exited the quarter with seasonal carryover inventory down double digits, we believe it is prudent to assume an elevated promotional environment for the back half of 2019."
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