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Here's Why Children's Place (PLCE) Marching Ahead of Industry
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The Children's Place, Inc. (PLCE - Free Report) , one of the widely recognized names in the Retail - Apparel And Shoes industry, has exhibited an outstanding run on the bourses in the past one year. In the said period, shares of this Zacks Rank #1 (Strong Buy) company have surged about 52.6% against the industry’s decline of 10.5%. Digital transformation, superior product assortment and sturdy demand — as people resume active social lifestyles — have been contributing to revenue generation. You can see the complete list of today’s Zacks #1 Rank stocks here.
This pure-play children’s specialty apparel retailer continued with its decent performance in third-quarter fiscal 2021. Significant structural changes made in business and incremental digital investments made pre-pandemic continue to drive upbeat performance. Without doubt, favorable response toward product assortment, higher price realization and lower promotional activity have been acting as tailwinds.
Let’s Analyze
The Children's Place has been aggressively adopting strategies and making planned investments to cater to consumer demand and behavior. It has been focusing on superior product strategy to resonate well with millennial customers as well as advancing omni-channel capabilities. In this respect, the launch of a new tween fashion apparel, footwear and accessories brand, Sugar & Jade, is worth mentioning. We note that Sugar & Jade is a digital-only brand and the first brand available on The Children's Place’s new Salesforce e-commerce platform. The company has also launched Afterpay, a buy now pay later option, for its customers.
Impressively, the company’s $50 million digital transformation investment is reaping benefits. Digital sales accounted for 45% of total net sales during the third quarter with more than 71% of digital business now coming through a mobile device. The company targets a steady state annual digital penetration of 50%. Consolidated digital sales surged 36% during the third quarter. Digital sales jumped 40% in the United States and 2% in Canada.
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With changing consumer shopping patterns, the company has been making efforts to lower dependency on brick-and-mortar platform and shift toward digitization. Entering fiscal 2022, the company aims to generate 75% of its total revenues from sources outside the traditional malls.
With respect to its store fleet optimization strategy, The Children’s Place permanently shuttered 47 stores during the nine-month period ended Oct 30, 2021. Five locations were closed during the third quarter. As a result of favorable lease negotiations, the company now plans to close 275 stores since the beginning of fiscal 2020, compared to its previously planned target of 300 closures. The company’s current plan calls for an additional 50 store closures in the final quarter.
Wrapping Up
The Children's Place commenced the fourth quarter on a strong note and remains well on track to accelerate operating margin expansion in fiscal 2021 and beyond. The Zacks Consensus Estimate for the company’s current financial year sales and earnings per share (EPS) suggests growth of 27.4% and 464.9%, respectively, from the year-ago period.
Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1. BOOT delivered a trailing four-quarter earnings surprise of 35.3%, on average.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and EPS suggests growth of 54.6% and 188%, respectively, from the year-ago period.
Tapestry, which provides luxury accessories and branded lifestyle products, carries a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 29%, on average.
The Zacks Consensus Estimate for Tapestry’s current financial year sales and EPS suggests growth of 14.8% and 17.9%, respectively, from the year-ago period. TPR has an expected EPS growth rate of 12.3% for three-five years.
Target, a general merchandise retailer, carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 19.7%, on average.
The Zacks Consensus Estimate for Target’s current financial year sales and EPS suggests growth of 13.9% and 40%, respectively, from the year-ago period. TGT has an expected EPS growth rate of 14.4% for three-five years.
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Here's Why Children's Place (PLCE) Marching Ahead of Industry
The Children's Place, Inc. (PLCE - Free Report) , one of the widely recognized names in the Retail - Apparel And Shoes industry, has exhibited an outstanding run on the bourses in the past one year. In the said period, shares of this Zacks Rank #1 (Strong Buy) company have surged about 52.6% against the industry’s decline of 10.5%. Digital transformation, superior product assortment and sturdy demand — as people resume active social lifestyles — have been contributing to revenue generation. You can see the complete list of today’s Zacks #1 Rank stocks here.
This pure-play children’s specialty apparel retailer continued with its decent performance in third-quarter fiscal 2021. Significant structural changes made in business and incremental digital investments made pre-pandemic continue to drive upbeat performance. Without doubt, favorable response toward product assortment, higher price realization and lower promotional activity have been acting as tailwinds.
Let’s Analyze
The Children's Place has been aggressively adopting strategies and making planned investments to cater to consumer demand and behavior. It has been focusing on superior product strategy to resonate well with millennial customers as well as advancing omni-channel capabilities. In this respect, the launch of a new tween fashion apparel, footwear and accessories brand, Sugar & Jade, is worth mentioning. We note that Sugar & Jade is a digital-only brand and the first brand available on The Children's Place’s new Salesforce e-commerce platform. The company has also launched Afterpay, a buy now pay later option, for its customers.
Impressively, the company’s $50 million digital transformation investment is reaping benefits. Digital sales accounted for 45% of total net sales during the third quarter with more than 71% of digital business now coming through a mobile device. The company targets a steady state annual digital penetration of 50%. Consolidated digital sales surged 36% during the third quarter. Digital sales jumped 40% in the United States and 2% in Canada.
With changing consumer shopping patterns, the company has been making efforts to lower dependency on brick-and-mortar platform and shift toward digitization. Entering fiscal 2022, the company aims to generate 75% of its total revenues from sources outside the traditional malls.
With respect to its store fleet optimization strategy, The Children’s Place permanently shuttered 47 stores during the nine-month period ended Oct 30, 2021. Five locations were closed during the third quarter. As a result of favorable lease negotiations, the company now plans to close 275 stores since the beginning of fiscal 2020, compared to its previously planned target of 300 closures. The company’s current plan calls for an additional 50 store closures in the final quarter.
Wrapping Up
The Children's Place commenced the fourth quarter on a strong note and remains well on track to accelerate operating margin expansion in fiscal 2021 and beyond. The Zacks Consensus Estimate for the company’s current financial year sales and earnings per share (EPS) suggests growth of 27.4% and 464.9%, respectively, from the year-ago period.
Pick These 3 Stocks Too
Some other top-ranked stocks are Boot Barn Holdings (BOOT - Free Report) , Tapestry (TPR - Free Report) and Target (TGT - Free Report) .
Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1. BOOT delivered a trailing four-quarter earnings surprise of 35.3%, on average.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and EPS suggests growth of 54.6% and 188%, respectively, from the year-ago period.
Tapestry, which provides luxury accessories and branded lifestyle products, carries a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 29%, on average.
The Zacks Consensus Estimate for Tapestry’s current financial year sales and EPS suggests growth of 14.8% and 17.9%, respectively, from the year-ago period. TPR has an expected EPS growth rate of 12.3% for three-five years.
Target, a general merchandise retailer, carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 19.7%, on average.
The Zacks Consensus Estimate for Target’s current financial year sales and EPS suggests growth of 13.9% and 40%, respectively, from the year-ago period. TGT has an expected EPS growth rate of 14.4% for three-five years.