Stifel affirms The Children's Place, Inc. (PLCE) with a Hold rating following Q1 results reported earlier Thursday.

Analyst Richard Jaffe noted that PLCE's adjusted ES of $0.83 was flat with the firm's outlook.

Jaffe also noted he following key takeaways from PLCE's report:

• Solid 1Q - Better than expected results (vs. management’s original guidance) were driven by: positive customer response to the company’s Spring assortments (with an improved fashion offering and more seasonally appropriate product) and the acceleration of business trends in the second half of the quarter when weather turned more seasonable (comp trends improved from the negative mid-single digits as of March 12 to a positive 0.7 percent for the quarter).
• Good Start to 2Q – May has gotten off to a solid start driven by favorable weather and strong customer acceptance of the company’s merchandise. Management reiterated its EPS guidance for 2Q.
• We believe that expense reduction and real estate rationalization will help profitability going forward. Additionally, the new channels for merchandise distribution (international and wholesale) and a focus on omni-channel should contribute to sales growth. However, we believe that at the current share price the reward is limited and risk, as always, remains significant, given the volatility of fashion apparel retailers, the vagaries of fashion, apparel trends, competitive challenges (particularly the low-cost apparel providers), and consumer preference.

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