These Four Things Could Boost This Specialty Retailer’s Earnings

The Children’s Place Retail Stores (PLCE) Consumer Discretionary – Specialty Retail | Reports May 17, Before Market Opens

Key Takeaways

Clothing retailer, The Children’s Place, is scheduled to report first quarter earnings today, before the market opens. The company capped off 2015 with strong fourth quarter results that featured positive revenue growth for the first time in 2 fiscal years. Much of 2015 was devoted to implementing a new strategy that would deliver growth on both the top and bottom line. Expectations are high that this momentum will carry over into the first quarter and throughout 2016. So far, Q1 is off to a strong start with comparable store sales running at 9.7% through the first 6 weeks.

The Estimize community. is looking for earnings per share of $1.06, 28% higher from a year earlier and 3 cents greater than the Wall Street consensus. Revenue is expected to come in at $415 million, a 3% increase from $405 million posted in Q1 2015. On average, shares see positive movements through and following earnings, which should give a marginal boost to shares which are already up 24% year to date. 

The Children’s Place turnaround has been built on four strategic initiatives: superior product, technology, growth through alternate channels, and store fleet optimization. The success of these initiatives delivered positive comparable sales last year and margin improvements. Consistent with its store optimization, the company closed 16 stores during Q4 2015 and 32 during 2015. Furthermore, the company opened 4 new domestic stores and continues to expand its international presence