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Children's Place (PLCE)
NASDAQ:PLCE
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Children's Place
(NASDAQ:PLCE)
33Underperform
Children's Place (PLCE) vs. S&P 500 (SPY)
Market Cap
$86.68M
Dividend YieldN/A
Average Volume (3M)409.73K
Price to Earnings (P/E)―
Beta (1Y)1.98
Revenue Growth-10.65%
EPS Growth-129.52%
CountryUS
Employees2,730
SectorConsumer Cyclical
Sector Strength63
IndustryApparel - Retail
Share Statistics
EPS (TTM)-0.75
Shares Outstanding12,784,972
10 Day Avg. Volume560,101
30 Day Avg. Volume409,727
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.08
Price to Cash Flow (P/CF)-0.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.00Price Target Upside29.15% Upside
Rating ConsensusHold
Number of Analyst Covering1
Children's Place Business Overview & Revenue Model
Company DescriptionThe Children's Place, Inc. operates as a children's specialty apparel retailer. The company operates in two segments, The Children's Place U.S. and The Children's Place International. It sells apparel, footwear, accessories, and other items for children; and designs, contracts to manufacture, and sells merchandise under the proprietary The Children's Place, Place, Baby Place, Gymboree, and Sugar & Jade brand names. As of January 29, 2022, the company had 672 stores in the United States, Canada, and Puerto Rico; online stores at childrensplace.com, gymboree.com, and sugarandjade.com; and seven international franchise partners operated 211 international points of distribution in 16 countries. The company was formerly known as The Children's Place Retail Stores, Inc. and changed its name to The Children's Place, Inc. in June 2014. The Children's Place, Inc. was founded in 1969 and is headquartered in Secaucus, New Jersey.
How the Company Makes MoneyChildren's Place makes money primarily through the sale of children's apparel and accessories. The company's revenue model relies on its extensive network of retail stores and its e-commerce platform, which together provide multiple channels for reaching customers. Key revenue streams include direct sales to consumers through these channels, as well as potential wholesale arrangements. The company also benefits from brand partnerships and seasonal promotions that drive foot traffic and online sales, contributing significantly to its earnings.
Children's Place Financial Statement Overview
Summary
Children's Place is facing substantial financial difficulties. The income statement indicates declining revenues and persistent losses. The balance sheet shows a precarious financial structure with negative equity. Cash flow struggles further exacerbate the situation, raising concerns about liquidity and financial sustainability.Income Statement
The company's income statement reveals concerning trends. Gross profit margin for TTM is approximately 30.03%, indicating pricing or cost challenges. Net profit margin is negative due to substantial net losses, reflecting profitability issues. Revenue has declined over the periods, with a negative growth rate from the previous year. EBIT and EBITDA margins are also negative, highlighting operational inefficiencies.35
Negative
Balance Sheet
The balance sheet shows a troubling financial position with negative stockholders' equity in TTM, indicating liabilities exceed assets. The debt-to-equity ratio is not calculable due to negative equity, but high total debt suggests significant leverage. Return on equity is negative due to losses, and equity ratio is negative, reflecting financial vulnerability.20
Very Negative
Cash Flow
Cash flow analysis indicates severe challenges, with negative operating and free cash flows in TTM. The operating cash flow to net income ratio is negative, indicating cash flow issues relative to earnings. Free cash flow growth is negative, and the cash flow to net income ratio underscores cash shortages.25
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.43B | 1.60B | 1.71B | 1.92B | 1.52B | 1.87B | Gross Profit |
| 430.15M | 445.27M | 514.16M | 794.74M | 333.25M | 655.30M | EBIT |
| -79.95M | -83.80M | 4.98M | 275.65M | -161.39M | 96.36M | EBITDA |
| -40.15M | -36.52M | 138.96M | 434.64M | -20.30M | 320.40M | Net Income Common Stockholders |
| -178.66M | -154.54M | -1.14M | 187.17M | -140.37M | 73.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 170.53M | 13.64M | 16.69M | 54.79M | 63.55M | 68.49M | Total Assets |
| 875.44M | 800.31M | 986.28M | 1.04B | 1.14B | 1.18B | Total Debt |
| 0.00 | 463.84M | 511.80M | 450.86M | 643.42M | 604.58M | Net Debt |
| -170.53M | 450.20M | 495.11M | 396.07M | 579.87M | 536.10M | Total Liabilities |
| 295.77M | 809.33M | 827.80M | 811.99M | 1.04B | 946.21M | Stockholders Equity |
| 579.67M | -9.02M | 158.48M | 225.47M | 93.38M | 235.19M |
| Cash Flow | Free Cash Flow | ||||
| -125.61M | 65.24M | -53.80M | 103.97M | -66.30M | 43.45M | Operating Cash Flow |
| -106.50M | 92.80M | -8.22M | 133.28M | -35.72M | 177.90M | Investing Cash Flow |
| -19.17M | -27.79M | -45.95M | -29.29M | -30.37M | -134.35M | Financing Cash Flow |
| 118.75M | -68.27M | 17.06M | -112.74M | 60.93M | -44.37M |
Children's Place Technical Analysis
Negative
5.42
Price Trends
8.39
Negative
10.07
Negative
10.25
Negative
Market Momentum
-0.69
Positive
31.81
Neutral
12.21
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLCE, the sentiment is Negative. The current price of 5.42 is below the 20-day moving average (MA) of 7.77, below the 50-day MA of 8.39, and below the 200-day MA of 10.25, indicating a bearish trend. The MACD of -0.69 indicates Positive momentum. The RSI at 31.81 is Neutral, neither overbought nor oversold. The STOCH value of 12.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PLCE.
Children's Place Risk Analysis
Children's Place disclosed 32 risk factors in its most recent earnings report. Children's Place reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Children's Place Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.35B | 7.26 | 21.39% | 8.71% | -3.45% | -18.26% | |
60 Neutral | $129.53M | ― | -3.31% | 7.41% | -2.14% | -173.54% | |
59 Neutral | $11.53B | 10.43 | -0.22% | 4.02% | 1.19% | -15.83% | |
57 Neutral | $1.12B | 96.17 | 0.62% | ― | -2.20% | ― | |
55 Neutral | $172.98M | ― | -31.87% | ― | 0.69% | -254.98% | |
47 Neutral | $200.90M | ― | -3.49% | ― | 0.02% | -31.11% | |
33 Underperform | $86.68M | ― | -521.67% | ― | -10.65% | -129.52% |
* Consumer Cyclical Sector Average
Performance Comparison
PLCE
Children's Place
5.42
-1.69
-23.77%
CRI
Carter's
36.72
-31.20
-45.94%
CTRN
Citi Trends
19.59
-3.10
-13.66%
DBI
Designer Brands
2.69
-5.69
-67.90%
FL
Foot Locker
11.21
-10.31
-47.91%
GCO
Genesco
17.92
-7.24
-28.78%
Children's Place Earnings Call Summary
Earnings Call Date: Apr 11, 2025 | % Change Since: -20.06% | Next Earnings Date: Jun 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong digital growth and successful marketing strategies but was overshadowed by a decline in overall sales and increased distribution costs. Management expressed confidence in addressing these challenges, but the current financial pressures were evident.Highlights
Digital Sales Growth
E-commerce sales grew in the low single digits, with e-commerce representing 57% of retail sales in Q3, up from 50% last year and 37% in 2019.
Inventory Reduction
Ending inventories were down 16%, exceeding expectations, contributing to a healthy inventory position entering the holiday season.
Successful Marketing Campaigns
Significant marketing campaigns including partnerships with Jonas Brothers and Mariah Carey delivered billions of impressions and high returns on ad spend.
Strong Wholesale Performance
The Amazon marketplace delivered an outstanding quarter with the largest week in history during Prime Day.
Lowlights
Sales Decline
Net sales decreased by 5.7% to $480.2 million, with U.S. net retail sales down 8.9% and Canadian sales down 22.1%.
Increased Distribution Costs
Higher-than-planned distribution costs impacted the bottom line due to increased e-commerce volumes, higher labor costs, and delays in planned freight savings.
Gross Profit Margin Decrease
Gross profit margin decreased to 33.7% from 34.8% due to higher distribution and fulfillment expenses.
Interest Expense Increase
Interest expense increased to $7.9 million due to higher average borrowings and interest rates.
Company Guidance
During the third quarter earnings call for The Children's Place, the company exceeded expectations with net sales reaching $480.2 million, largely driven by a low single-digit increase in e-commerce sales and a significant rise in digital traffic. E-commerce represented an impressive 57% of retail sales, up from 50% the previous year. Despite a challenging macroeconomic environment, the company maintained strong merchandise margins. However, increased distribution costs due to higher fulfillment and labor expenses impacted the bottom line, with gross profit margins slightly declining to 33.7% from 34.8% the previous year. Inventory levels ended 16% lower, setting a strong foundation for Q4. For Q4, the company anticipates net sales between $460 million and $465 million and an adjusted operating profit margin of 2% to 3%. Full-year 2023 expectations include net sales of $1.605 billion to $1.61 billion, with adjusted net loss per share projected between negative $0.59 and negative $0.39. Looking forward, the company plans further inventory reductions and capital expenditures of $25 million to $30 million, focusing on digital initiatives and fulfillment enhancements.Children's Place Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Children’s Place Strengthens Board with New Appointment
Positive
Feb 18, 2025
On February 13, 2025, The Children’s Place appointed Rhys Summerton to its Board of Directors and Audit Committee. Mr. Summerton, an independent director and audit committee financial expert, brings extensive experience from his roles at Milkwood Capital and Citigroup. This appointment is part of the company’s strategy to enhance its governance with seasoned professionals, potentially impacting its operations and strategic direction positively.
Private Placements and Financing
Children’s Place Launches $90 Million Rights Offering
Neutral
Dec 31, 2024
The Children’s Place has initiated a rights offering to raise up to $90 million by issuing 9,230,769 shares of common stock to its shareholders. This financial maneuver aims to address the company’s outstanding indebtedness under its Credit Agreement and support general operational expenses, which may include further debt reduction.
Executive/Board ChangesBusiness Operations and Strategy
Children’s Place Announces Leadership Change and Bylaw Update
Neutral
Dec 12, 2024
The Children’s Place announced the departure of Sheamus Toal from his roles as COO and CFO, effective December 14, 2024, with Laura Lentini stepping in as Interim CFO. Additionally, the company amended its bylaws to update stockholder meeting requirements and board vacancies, reflecting ongoing governance adjustments.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.