Children’s Place Plunges On Earnings Miss; Gymboree’s Acquisition

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Children’s Place Inc (NASDAQ: PLCE)

Children’s Place Inc. are tumbling after the retailer of kids’ apparel and accessories reported fiscal 2018 fourth-quarter earnings and sales that missed market expectations.

The company also issued a disappointing guidance for the current year, laying blame on “unprecedented challenges” from the liquidation of rival Gymboree Group Inc.




Children’s Place will pay $76 million in cash to acquire the intellectual property and related assets of Gymboree and Crazy 8. PLCE stock was down $11.86, or 12.54% to change hands at $82.74 as of 1:32 p.m. in New York.

PLCE Earnings & Outlook

Children’s Place posted net income of $12.02 million, or $0.74 per share in the quarter, compared with a net loss of $9.9 million, or $0.57 per share, in the earlier-year period. Adjusted for certain items, earnings came to $1.10 per share.

Fourth-quarter net sales were $530.6 million, a decline of 6.9% from the same three months a year ago. On average, analysts surveyed by FactSet expected adjusted earnings of $2.10 per share on net sales of $553.1 million.

Sales at its stores open for at least 12 months were down 0.6% missing forecasts of a 2.7% rise. Looking into fiscal 2019, Children’s Place anticipates full-year adjusted earnings to be in the region of $5.25 to $5.75 per share on net sales of $1.89 billion to $1.92 billion.

Analysts expect the company to post fiscal 2019 adjusted earnings of $8.84 per share on net sales of $2.01 billion. The company also forecasts comparable store sales of flat to down 1%, while analysts have called for 3.7% rise.



Children’s Place CEO Comments

Jane Elfers, President and Chief Executive Officer commented, “We have never experienced a total liquidation of a direct competitor of the size and proximity of Gymboree.  We overlap with nearly 70% of the approximately 800 Gymboree and Crazy 8 stores, all of which will complete their liquidation events and close within the next 60 days.”

“Additionally, we are challenged by a very late Easter. Taken together, these create unprecedented near-term visibility challenges, and, as a result, the first half of 2019 is anticipated to be a highly disruptive time for The Children’s Place.”

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 childrensplace.com, 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

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