Retail

Will Earnings Suffice at Children's Place?

The Children’s Place, Inc. (NASDAQ: PLCE) is among the retailers expected to report earnings this week. Its earnings report is due Tuesday morning, and some investors are wondering whether the children’s destination retail store chain will generate enough in earnings.

Analysts have their consensus estimates pegged at -$0.33 in earnings per share on revenues of $380.6 million. That would be down 1.1% in revenue and would compare to -$0.37 a year ago.

Consensus estimates ahead are $1.96 EPS in the coming third quarter and $3.45 EPS in fiscal 2016. That would be on a revenue decline of less than 1%, to $483.6 million and $1.75 billion respectively.

One issue which may impact the reaction is the short interest in Children’s Place being 2.5 million shares as of the end of July. With an average daily volume of closer to 300,000 shares, there has been no serious volume that would indicate any serious short covering. Shares are up marginally since the end  of July, but not enough to mask short covering.

Back in May, The Children’s Place announced with Macellum SPV II, L.P. and Barington Companies Equity Partners that they had reached an agreement to resolve their proxy contest. They appointed Macellum and Barington’s nominee Robert Mettler as a new independent member of the company’s board of directors. The board also committed to appoint an additional, mutually agreeable independent director to the board as well.

Children’s Place has a market cap of $1.2 billion and a dividend yield of about 1%.

At $58.13, the stock has a 52-week range of $46.85 to $69.90 and has a consensus price target of $68.32.

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