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Factors Shaping Up The Children's Place's (PLCE) Q2 Earnings
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The Children's Place, Inc. (PLCE - Free Report) is likely to witness an increase in the top line when it reports second-quarter fiscal 2021 numbers on Aug 18, before market open. The Zacks Consensus Estimate for revenues is pegged at $418.7 million, suggesting an increase of 13.5% from the prior-year reported figure.
The Zacks Consensus Estimate for quarterly earnings has been stable at 19 cents over the past 30 days. It suggests a sharp turnaround from a loss of $1.48 reported in the year-ago period.
Key Factors to Note
Children's Place’s focus on a superior product strategy to resonate well with millennial customers as well as advancing omni-channel capabilities and augmenting supply chain is likely to have played a vital role in revenue generation. Sturdy demand, higher price realization and lower promotional activity are likely to have favorably impacted the quarterly performance. The top line has likely further gained from acceleration in back-to-school sales, ability to hold new digital customers gained amid the pandemic, and a significant improvement in store customer count.
On its last earnings call, management highlighted that Children’s Place commenced the second quarter on a strong note. Although management anticipated e-commerce sales to be lower versus last year, it projected sturdy second-quarter store sales as the company anniversary the shutdown of entire store fleet for about 50% of the quarter last year. We note that the company had witnessed unprecedented levels of e-commerce demand last year.
Again, any decrease in occupancy costs owing to its fleet optimization strategy should have contributed to operating margin expansion in the quarter under review. Also, the company has been focusing on curtailing non-essential expenses and optimizing capital expenditures. However, an increase in inbound transportation expenses due to supply chain disruption remains a concern.
The Childrens Place, Inc. Price, Consensus and EPS Surprise
Our proven model does not conclusively predict an earnings beat for 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Children's Place has a Zacks Rank #3, it carries an Earnings ESP of 0.00%.
3 Stocks With Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
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Factors Shaping Up The Children's Place's (PLCE) Q2 Earnings
The Children's Place, Inc. (PLCE - Free Report) is likely to witness an increase in the top line when it reports second-quarter fiscal 2021 numbers on Aug 18, before market open. The Zacks Consensus Estimate for revenues is pegged at $418.7 million, suggesting an increase of 13.5% from the prior-year reported figure.
The Zacks Consensus Estimate for quarterly earnings has been stable at 19 cents over the past 30 days. It suggests a sharp turnaround from a loss of $1.48 reported in the year-ago period.
Key Factors to Note
Children's Place’s focus on a superior product strategy to resonate well with millennial customers as well as advancing omni-channel capabilities and augmenting supply chain is likely to have played a vital role in revenue generation. Sturdy demand, higher price realization and lower promotional activity are likely to have favorably impacted the quarterly performance. The top line has likely further gained from acceleration in back-to-school sales, ability to hold new digital customers gained amid the pandemic, and a significant improvement in store customer count.
On its last earnings call, management highlighted that Children’s Place commenced the second quarter on a strong note. Although management anticipated e-commerce sales to be lower versus last year, it projected sturdy second-quarter store sales as the company anniversary the shutdown of entire store fleet for about 50% of the quarter last year. We note that the company had witnessed unprecedented levels of e-commerce demand last year.
Again, any decrease in occupancy costs owing to its fleet optimization strategy should have contributed to operating margin expansion in the quarter under review. Also, the company has been focusing on curtailing non-essential expenses and optimizing capital expenditures. However, an increase in inbound transportation expenses due to supply chain disruption remains a concern.
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 does not conclusively predict an earnings beat for 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Children's Place has a Zacks Rank #3, it carries an Earnings ESP of 0.00%.
3 Stocks With Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Gap (GPS - Free Report) has an Earnings ESP of +53.66% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nordstrom (JWN - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3.
Costco (COST - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #3.