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What Awaits The Children's Place (PLCE) This Earnings Season?

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The Children's Place, Inc. (PLCE - Free Report) is likely to register a decline in the top line when it reports fourth-quarter fiscal 2020 numbers on Mar 9, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $420.3 million, suggesting a decline of 18.1% from the prior-year reported figure.

In fact, the Zacks Consensus Estimate for the bottom line stands at a loss of 17 cents that narrowed by 6 cents in the past seven days. The consensus mark compares unfavorably with earnings of $1.85 per share reported in the year-ago quarter.

Notably, this pure-play children’s specialty apparel retailer has a trailing four-quarter earnings surprise of 47.7%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a wide margin.

Key Factors to Note

On its last earnings call, management highlighted that sales and profitability are likely to remain under pressure in fourth-quarter fiscal 2020 due to several challenges associated with coronavirus pandemic. These include lower demand for dress-up products, a major decline in store traffic, social distancing measures, reduced operating hours at malls, and countrywide surges in coronavirus cases, which in turn resulted in more temporary store closures. Apart from this, fourth-quarter sales and margins might have borne the brunt of capacity constraints in the domestic logistics network stemming from unprecedented level of expected online demand and the associated freight surcharges levied by the company’s major carriers.

Nonetheless, The Children's Place remains committed to address the challenges related to the pandemic. In this respect, the company has been directing resources toward digital platforms in order to better engage with customers, augmenting supply chain, accelerating fleet optimization initiative and concentrating on improving financial flexibility. It has been focusing on curtailing non-essential expenses and optimizing capital expenditures.

The Childrens Place, Inc. Price, Consensus and EPS Surprise

The Childrens Place, Inc. Price, Consensus and EPS Surprise

The Childrens Place, Inc. price-consensus-eps-surprise-chart | The Childrens Place, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for The Children's Place this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Children's Place has a Zacks Rank #1 and an Earnings ESP of +76.12%.

3 More Stocks With Favorable Combination

Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Ulta Beauty (ULTA - Free Report) presently has an Earnings ESP of +6.24% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ollie's Bargain Outlet (OLLI - Free Report) currently has an Earnings ESP of +3.73% and a Zacks Rank #3.

Dollar General (DG - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank #3 at present.

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