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Children's Place (PLCE)
NASDAQ:PLCE
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Children's Place (PLCE) AI Stock Analysis

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PLCE

Children's Place

(NASDAQ:PLCE)

Rating:46Neutral
Price Target:
$6.00
▲(5.08%Upside)
The overall stock score is primarily influenced by significant financial challenges, including negative profitability and high leverage. While technical analysis shows some short-term bullish signals, the long-term outlook remains concerning. Valuation metrics further underscore the stock's potential overvaluation.

Children's Place (PLCE) vs. SPDR S&P 500 ETF (SPY)

Children's Place Business Overview & Revenue Model

Company DescriptionThe Children's Place, Inc. (PLCE) is a leading specialty retailer of children's apparel and accessories. The company primarily operates in the North American market, providing high-quality, stylish, and age-appropriate clothing for infants, toddlers, and children up to the age of 14. The Children's Place offers a range of products including tops, bottoms, dresses, outerwear, shoes, and accessories, both in-store and through its e-commerce platform. With a focus on value, quality, and convenience, the company aims to be the preferred shopping destination for children's fashion.
How the Company Makes MoneyThe Children's Place generates revenue through the sale of children's apparel and accessories in its retail stores and online platform. The company's key revenue streams include its physical retail locations, which provide a traditional shopping experience, and its e-commerce operations, which cater to a growing digital consumer base. Additionally, the company offers various promotions and loyalty programs to incentivize repeat purchases. Strategic partnerships and exclusive collections also contribute to the company's earnings, allowing it to offer unique products and expand its market reach.

Children's Place Earnings Call Summary

Earnings Call Date:Jun 06, 2025
(Q3-2024)
|
% Change Since: -16.76%|
Next Earnings Date:Aug 13, 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.
Q3-2024 Updates
Positive Updates
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.
Negative Updates
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 Financial Statement Overview

Summary
The financial performance of Children's Place is notably poor, characterized by declining revenues, negative profitability, high leverage, and negative cash flows. These issues suggest financial instability and a need for strategic restructuring.
Income Statement
35
Negative
The company's income statement shows significant challenges, with a declining revenue trend from 2022 to TTM 2025. The TTM (Trailing-Twelve-Months) gross profit margin is 32.2%, which reflects a decrease compared to historical performance. The net profit margin is negative, indicating the company is not profitable, and EBIT and EBITDA margins are also negative for TTM, showing operational inefficiencies. Revenue growth has been negative, highlighting a concerning trend in sales performance.
Balance Sheet
25
Negative
The balance sheet reveals a worrying financial position with a very high debt-to-equity ratio due to minimal stockholders' equity, even negative in some periods. The equity ratio is extremely low at 0.18% for TTM, reflecting high leverage and significant financial risk. Return on equity is not meaningful due to negative equity, and the company's assets are primarily funded by debt, which poses a risk.
Cash Flow
30
Negative
Cash flow analysis highlights struggles with generating positive cash flow. The TTM free cash flow is negative, and the operating cash flow to net income ratio is not favorable, indicating cash flow issues. The free cash flow to net income ratio is also negative, underscoring inefficiencies in cash generation relative to earnings.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue1.39B1.60B1.71B1.92B1.52B
Gross Profit459.46M445.27M514.16M794.74M333.25M
EBITDA25.96M-36.52M138.96M434.64M-20.30M
Net Income-57.82M-154.54M-1.14M187.17M-140.37M
Balance Sheet
Total Assets747.55M800.31M986.28M1.04B1.14B
Cash, Cash Equivalents and Short-Term Investments5.35M13.64M16.69M54.79M63.55M
Total Debt586.33M463.84M511.80M450.86M643.42M
Total Liabilities806.96M809.33M827.80M811.99M1.04B
Stockholders Equity-59.41M-9.02M158.48M225.47M93.38M
Cash Flow
Free Cash Flow-133.42M65.24M-53.80M103.97M-66.30M
Operating Cash Flow-117.59M92.80M-8.22M133.28M-35.72M
Investing Cash Flow-15.83M-27.79M-45.95M-29.29M-30.37M
Financing Cash Flow128.40M-68.27M17.06M-112.74M60.93M

Children's Place Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price5.71
Price Trends
50DMA
5.22
Positive
100DMA
6.10
Negative
200DMA
8.97
Negative
Market Momentum
MACD
0.26
Negative
RSI
55.88
Neutral
STOCH
57.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLCE, the sentiment is Neutral. The current price of 5.71 is above the 20-day moving average (MA) of 5.12, above the 50-day MA of 5.22, and below the 200-day MA of 8.97, indicating a neutral trend. The MACD of 0.26 indicates Negative momentum. The RSI at 55.88 is Neutral, neither overbought nor oversold. The STOCH value of 57.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
$1.19B7.5118.91%8.09%-3.39%-28.96%
63
Neutral
$262.25M-3.07%1.85%22.34%
63
Neutral
$17.10B10.79-8.01%2.94%1.62%-25.73%
57
Neutral
$165.52M-9.20%5.97%-4.22%-386.70%
55
Neutral
$2.40B194.63-12.85%-2.62%0.93%
52
Neutral
$252.31M-29.52%1.85%-337.77%
46
Neutral
$133.23M-521.67%-12.15%75.86%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PLCE
Children's Place
5.71
-2.16
-27.45%
CRI
Carter's
32.75
-21.49
-39.62%
CTRN
Citi Trends
30.42
11.66
62.15%
DBI
Designer Brands
3.35
-4.16
-55.39%
FL
Foot Locker
25.17
-1.29
-4.88%
GCO
Genesco
24.33
-5.75
-19.12%

Children's Place Corporate Events

Executive/Board Changes
Children’s Place Appoints New Principal Accounting Officer
Neutral
Jul 3, 2025

On July 2, 2025, The Children’s Place, Inc. announced a significant leadership change with John Szczepanski being appointed as the Principal Accounting Officer, succeeding Laura Lentini, who has left the company. The departure of Ms. Lentini was amicable, with no disagreements regarding the company’s operations, policies, or practices.

The most recent analyst rating on (PLCE) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Children’s Place stock, see the PLCE Stock Forecast page.

Shareholder Meetings
Children’s Place Stockholders Approve Charter Amendments
Neutral
May 9, 2025

At the Annual Meeting of Stockholders on May 7, 2025, Children’s Place stockholders approved several amendments to the company’s charter. These changes include allowing stockholders to act by written consent without a meeting, giving stockholders the right to fill board vacancies, and making housekeeping amendments, which were filed with the Delaware Secretary of State on the same day.

Shareholder MeetingsBusiness Operations and Strategy
Children’s Place Announces Key Decisions at Annual Meeting
Neutral
May 7, 2025

At the 2025 Annual Meeting of Stockholders held on May 7, 2025, The Children’s Place, Inc. announced several key decisions. Stockholders voted on the election of six directors, ratified the appointment of BDO USA, P.C. as the independent accounting firm, and approved amendments to the company’s charter regarding stockholder rights and board vacancies. These decisions are expected to impact the company’s governance and operational strategies moving forward.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 24, 2025