We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Children's Place (PLCE) Q4 Loss Wider Than Estimates
Read MoreHide Full Article
The Children’s Place, Inc. (PLCE - Free Report) reported dismal fourth-quarter fiscal 2024 results, wherein the bottom line beat the Zacks Consensus Estimate and the top line met the same. Also, this pure-play children’s specialty apparel retailer witnessed a year-over-year decline in both metrics.
Shares of this Zacks Rank #3 (Hold) company have lost 25.2% in the past three months against the industry’s growth of 4.1%.
The Children's Place, Inc. Price, Consensus and EPS Surprise
The Children’s Place posted an adjusted loss per share of $7.38, wider than the Zacks Consensus Estimate of an adjusted loss of $2.61. The company posted an adjusted loss of $3.87 per share in the year-ago quarter.
Net sales of $455 million declined 0.2% year over year primarily due to a decrease in retail sales, driven by fewer stores and reduced foot traffic. However, this was somewhat mitigated by the robust e-commerce performance. Meanwhile, comparable retail sales saw a rise of 4.8% in the quarter.
The company saw robust growth in its digital and mobile platforms in the fourth quarter of fiscal 2023. The U.S. mobile app sales increased 31% year over year. Mobile app traffic also grew 32%. This highlights a strong trend toward mobile shopping among consumers. Digital penetration for the quarter stood at 57%, which represents the proportion of total sales generated through digital channels, emphasizing the company's effective digital-first strategy.
Notably, mobile transactions accounted for 81% of all digital interactions, showcasing the success of the company's mobile-first approach and its ability to cater to the evolving preferences of consumers who are increasingly opting for shopping via smartphones. This performance points to a successful digital strategy that supports the company's overall business resilience and customer engagement.
Adjusted gross profit was $98.9 million, up $19.2 million from $79.7 million reported in the year-ago quarter. The adjusted gross margin leveraged 420 basis points (bps) to 21.7% due to lower product input costs, including cotton and supply-chain expenses, which had affected margins in the prior year. However, these gains were somewhat diminished by margin pressures from aggressive promotional strategies.
Adjusted selling, general and administrative (“SG&A”) expenses were $118.7 million, down from $128.5 million in the year-ago quarter. Adjusted SG&A, as a percentage of sales, leveraged 210 bps to 26.1%. This mainly resulted from decreases in equity-based compensation, and significant cuts in store and home office payroll. However, it was partially offset by planned increases in marketing expenditure and higher professional fees.
Image Source: Zacks Investment Research
Store Update
In the past three months, the company shuttered 68 stores. It closed 90 stores in the 12 months ending on Feb 3, 2024.
At the end of the fourth quarter, the company operated 523 stores with 2.6 million square feet, marking a 12.8% reduction in square footage from the previous year. Following the launch of its fleet optimization initiative in 2013, the company has permanently closed 676 stores.
Other Financial Aspects
The Children’s Place ended the quarter with cash and cash equivalents of $13.6 million. The company had $226.7 million outstanding on its revolving credit facility as of Feb 3, 2024. It generated $135.4 million in operating cash flows in the three months ended Feb 3, 2024, and $92.8 million over the 12 months ending on the same date. Stockholders' deficit at the end of the fourth quarter was $9 million.
Three Solid Picks
Some better-ranked Retail-Wholesale stocks are The Gap, Inc. (GPS - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GPS’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.9%, respectively, from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. The company has a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for American Eagle’s current fiscal-year earnings and sales indicates growth of 12.5% and 3.3%, respectively, from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. The company currently has a Zacks Rank of 2. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie’s current fiscal-year earnings and sales indicates growth of 19.8% and 5.6%, respectively, from the year-ago period’s reported figures.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
The Children's Place (PLCE) Q4 Loss Wider Than Estimates
The Children’s Place, Inc. (PLCE - Free Report) reported dismal fourth-quarter fiscal 2024 results, wherein the bottom line beat the Zacks Consensus Estimate and the top line met the same. Also, this pure-play children’s specialty apparel retailer witnessed a year-over-year decline in both metrics.
Shares of this Zacks Rank #3 (Hold) company have lost 25.2% in the past three months against the industry’s growth of 4.1%.
The Children's Place, Inc. Price, Consensus and EPS Surprise
The Children's Place, Inc. price-consensus-eps-surprise-chart | The Children's Place, Inc. Quote
Q4 in Detail
The Children’s Place posted an adjusted loss per share of $7.38, wider than the Zacks Consensus Estimate of an adjusted loss of $2.61. The company posted an adjusted loss of $3.87 per share in the year-ago quarter.
Net sales of $455 million declined 0.2% year over year primarily due to a decrease in retail sales, driven by fewer stores and reduced foot traffic. However, this was somewhat mitigated by the robust e-commerce performance. Meanwhile, comparable retail sales saw a rise of 4.8% in the quarter.
The company saw robust growth in its digital and mobile platforms in the fourth quarter of fiscal 2023. The U.S. mobile app sales increased 31% year over year. Mobile app traffic also grew 32%. This highlights a strong trend toward mobile shopping among consumers. Digital penetration for the quarter stood at 57%, which represents the proportion of total sales generated through digital channels, emphasizing the company's effective digital-first strategy.
Notably, mobile transactions accounted for 81% of all digital interactions, showcasing the success of the company's mobile-first approach and its ability to cater to the evolving preferences of consumers who are increasingly opting for shopping via smartphones. This performance points to a successful digital strategy that supports the company's overall business resilience and customer engagement.
Adjusted gross profit was $98.9 million, up $19.2 million from $79.7 million reported in the year-ago quarter. The adjusted gross margin leveraged 420 basis points (bps) to 21.7% due to lower product input costs, including cotton and supply-chain expenses, which had affected margins in the prior year. However, these gains were somewhat diminished by margin pressures from aggressive promotional strategies.
Adjusted selling, general and administrative (“SG&A”) expenses were $118.7 million, down from $128.5 million in the year-ago quarter. Adjusted SG&A, as a percentage of sales, leveraged 210 bps to 26.1%. This mainly resulted from decreases in equity-based compensation, and significant cuts in store and home office payroll. However, it was partially offset by planned increases in marketing expenditure and higher professional fees.
Image Source: Zacks Investment Research
Store Update
In the past three months, the company shuttered 68 stores. It closed 90 stores in the 12 months ending on Feb 3, 2024.
At the end of the fourth quarter, the company operated 523 stores with 2.6 million square feet, marking a 12.8% reduction in square footage from the previous year. Following the launch of its fleet optimization initiative in 2013, the company has permanently closed 676 stores.
Other Financial Aspects
The Children’s Place ended the quarter with cash and cash equivalents of $13.6 million. The company had $226.7 million outstanding on its revolving credit facility as of Feb 3, 2024. It generated $135.4 million in operating cash flows in the three months ended Feb 3, 2024, and $92.8 million over the 12 months ending on the same date. Stockholders' deficit at the end of the fourth quarter was $9 million.
Three Solid Picks
Some better-ranked Retail-Wholesale stocks are The Gap, Inc. (GPS - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GPS’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.9%, respectively, from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. The company has a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for American Eagle’s current fiscal-year earnings and sales indicates growth of 12.5% and 3.3%, respectively, from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. The company currently has a Zacks Rank of 2. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie’s current fiscal-year earnings and sales indicates growth of 19.8% and 5.6%, respectively, from the year-ago period’s reported figures.