The Children's Place (PLCE) PT Raised to $74 at B.Riley After Earnings Blowout
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B.Riley analyst Susan K. Anderson raised the price target on The Children's Place (NASDAQ: PLCE) to $74.00 (from $54.00) after the company reported 4Q20 adjusted EPS of $1.01, significantly above consensus estimates $(0.23). Sales were down –7.8% (vs.consensus estimates of –18.0%) while adj. GM deleveraged –211 bps and adj. SG&A leveraged +31 bps. E-comm sales were up +38% and represented 46% of 4Q sales. For the year, PLCE added 1.9M new digital customers and converted over 1M store-only customers to omni customers.
The analyst reiterated a Neutral rating, stating "As PLCE continues to close stores as a part of their fleet rationalization plan and shift to a digital-focused business, management estimates a 30% transfer rate of lost store sales, which is in line with their current results, with a near equal split of sales moving to e-comm and in-store. We believe PLCE has properly navigated through an extremely challenging FY20 and is now well-positioned to take share in the children's retailer space that has seen significant disruption during COVID. However, we remain on the sidelines until we see additional clarity on the impact of store closures on revenue and margins, improvement on e-comm fulfillment cost and efficiency, and trends for BTS 2021."
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