Apparel firm Children's Place Retail Stores Inc on Friday issued a profit warning for the second half citing sliding sales and problems with its fall merchandise.

The New Jersey-based company said it now expects break-even third-quarter results. It warned if those trends continue then earnings in the fourth quarter will be "only slightly positive".

The clothing chain cited a 30 per cent plunge in same-store sales to date and late deliveries and low inventories for the profit warning.

It also said unseasonal weather and weak retail environment were badly hitting sales.

"While our latest fall line had initial positive customer response, sales fell off dramatically in September," explained CEO Ezra Dabah.