Based on its earnings news and troubles with the SEC, Children's Place
It's not just the earnings -- or lack of them -- that makes me queasy. No, losing $27.4 million for the quarter is not exactly child's play. And it's not great news that same-store sales declined 1% and margins contracted because of markdowns. The big problem here is what caused a lack of earnings-per-share figures: The SEC is investigating stock-option grants.
But wait -- it gets even worse. Children's Place is trying to renegotiate its pact with Disney
Yet despite the delayed filings, poor controls, an uncertain outcome with Disney, a possible default, and the generally lousy performance, management feels "cautiously optimistic regarding the second half and are pleased with month-to-date sales trends." It feels so good, in fact, that it's slashing its guidance for the year to $2.25-$2.40 a share, from $3.45-$3.55 just back in May. How's that for optimism?
The company may cater to children, but this company has some grown-up problems. Competitor Gymboree
- Gymboree Grows While Competition Wilts
- Nobody's Home at Children's Place
- Fool on the Street: Children's Place Lost in the Woods
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Fool contributor Lawrence Rothman is happy to receive feedback, and he promises to read it when he's not being wrestled by his three children. He doesn't have any positions in the companies mentioned.