Why Children's Place Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of The Children's Place (NASDAQ: PLCE  ) moved higher today, gaining as much as 15% after a better-than-expected earnings report.

So what: The children's-clothing retailer posted a $0.42-per-share loss, but that beat expectations of a $0.54 loss. Revenue, meanwhile, was up 6% to $382.4 million, ahead of expectations at $381.1 million, but same-store sales declined 0.4%. Further encouraging investors was management's decision to lift its guidance to $3.15-$3.28 from a previous range of $3.05-$3.20. Management also now sees EPS of $1.83-$1.89.

Now what: The second quarter is a seasonally weak one for The Children's Place, so the quarterly loss should be seen in that light. However, the guidance lift is a little odd, as management dialed back its same-store sales forecast for the year, saying it now expects a drop in the low single digits. EPS have also been inflated by an aggressive buyback, an odd choice given that the company is in the midst of a transition, closing 100 of its underperforming stores over the next three years. Considering that transition and the declining same-store sales, shares seem overbought after today's rally, especially with a P/E of 17 based on this year's earnings projection.

Who are the real stars in retail today? Find out in The Motley Fool's new special report, "3 Companies Ready to Rule Retail."  Uncovering these top picks is totally free; just click here to read more.

Editor's note: A previous version of this article reported a $0.43-per-share loss. The Fool regrets the error.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2606896, ~/Articles/ArticleHandler.aspx, 11/23/2014 12:35:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 17,810.06 91.06 0.51%
S&P 500 2,063.50 10.75 0.52%
NASD 4,712.97 11.10 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

11/21/2014 4:00 PM
PLCE $54.67 Up +1.30 +2.44%
Children's Place R… CAPS Rating: **

Advertisement