Strong GM Results Boost The Children's Place (PLCE) in Q4; Stifel Affirms at 'Hold'
Stifel affirms its Hold rating on The Children's Place (Nasdaq: PLCE) following Q4 results reported earlier Tuesday.
Analyst Richard Jaffe commented that results were driven by better-than-expected gross margin.
Jaffe also noted the following key takeaways from The Children's Place's report:
- Margin Improvement in Challenging Environment - Despite the challenging traffic and a highly competitive retail environment, the company was able to leverage gross margin by 130 bps as improved systems and compelling assortments drove merchandise margins and higher average unit retail.
- Strong Start to 1Q – Comparable retail sales are running positive 9.7% quarter to date with every distribution channel, region and category comping positive. Favorable customer response to the spring floorset, warmer weather vs. LY, a shift in promotions to earlier in March and the benefit of an earlier Easter vs. LY is driving the strong comps. Management anticipates comps to decelerate somewhat after Easter, resulting in a mid-single digit comp for the 1Q. Management established 1Q and 2016 EPS guidance, which is significantly above consensus.
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