Stifel maintains Children's Place Retail Stores (Nasdaq: PLCE) at Hold following Q3 results issued earlier. PLCE posted Q3 EPS of $1.83, which was flat with Stifel's expectation.

Analyst Richard Jaffe outlined key takeaways from the results:

• Expense Savings Continue to Drive Results – While results were at the high-end of management’s guidance, the quality of the earnings was worse than expected. Compared to management’s guidance, gross margin was below plan due to increased promotions necessary to remain competitive and to liquidate excess inventory. Management was able to offset gross margin weakness with better than estimated expense management.
• Optimistic for Holiday - While management expects headwinds from external factors (a highly promotional retail environment and weak mall traffic) to continue in the 4Q, management believes that the company is well positioned for 4Q. Management’s optimism is driven by: 1) PLCE faces an easy 4Q comparison as sales and traffic were weak LY due to the polar vortex, which required increased promotions to clear product, 2) A better gift giving assortment, and 3) An improved inventory flow with additional floorsets in November and January that offer the customers more wear now merchandise

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The Children's Place closed at $51.37 yesterday.