The Children’s Place Shares Plunge After Trimming Fiscal 2018 Earnings Guidance

The Children’s Place

Children’s Place Inc (NASDAQ: PLCE)

The Children’s Place on Thursday announced third-quarter earnings that slightly missed estimates of Street analysts. An aggressive promotional environment and rising expenses hurt the bottom line of the New Jersey-based retailer.

The specialty retailer of kids’ apparel also lowered its adjusted earnings forecast for the full year. Shares of the company were down $11.59, or 9.41% in premarket trading to $110.56 in New York.

PLCE Earnings & Outlook

The company posted earnings of $49.9 million, or $3.03 per share, compared with $44.1 million, or $2.44 per share, in the same three months last year. Earnings, adjusted for special items, came to $3.07 per share, while sales were $522.5 million, up 6.6% year over year.

Analysts were expecting the company to report adjusted earnings of $3.08 per share on sales of $511.2 million. Identical-store sales grew 9.5% for the quarter to November 3, surpassing estimates of 8.3% rise. For the full year, the company slashed its adjusted earnings forecast to $7.69 to $7.79 per share, from its previous estimate of $8.09 to $8.29 per share.

The specialty retailer also views adjusted operating margin guidance in the range of 7.7% to 7.8%, compared with its earlier forecast of 8.5% to 8.7%. However, the company lifted its sales outlook for the year to $1.955 billion to $1.960 billion, up from $1.945 billion to $1.955 billion.

Children’s Place CEO Comments

Jane Elfers, President and Chief Executive Officer commented, “For Q3, we delivered adjusted EPS of $3.07, the high-end of our guidance range.  Led by surging demand in our digital channels, we delivered an industry-leading 9.5% comp on top of a positive 5.1% comp last year. Our digital channels delivered a 38% increase, representing 29% of our net sales for the quarter.”

“Our strategy to take market share continues to produce meaningful results; we delivered positive traffic in our brick-and-mortar stores and generated positive comps every month in the quarter.  Importantly, our customer file increased five percent in Q3, which provides us with increased visibility into future sales.”

Children’s Place, Inc. Profile

The Children’s Place, Inc. operates as a children’s specialty apparel retailer. The company operates in two segments, The Children’s Place U.S. and The Children’s Place International. It sells apparel, accessories, footwear, and other items for children; and designs, contracts to manufacture, and sells merchandise under the proprietary The Children’s Place, Place, and Baby Place brand names.

As of February 3, 2018, the company operated 1,014 stores in the United States, Canada, and Puerto Rico; and 190 international points of distribution operated by its 7 franchise partners in 19 countries. It also sells its products through, an online store.

The company was formerly known as The Children’s Place Retail Stores, Inc. and changed its name to The Children’s Place, Inc. in June 2014. The Children’s Place, Inc. was founded in 1969 and is headquartered in Secaucus, New Jersey. – Yahoo Finance