The Children's Place (PLCE 137.87, -20.08, -12.71%) is trading lower despite raising
same-store sales guidance and reaffirming EPS guidance for the third quarter
after the company announced that CFO Anurup Pruthi and President of Global
Product Pamela Wallack have left the company to pursue other opportunities.
The company described this news as an effort to streamline the company’s senior leadership structure.
Chief Executive Jan Elfers will permanently re-assume direct responsibility for product and Chief Operating Officers Mike Scarpa will permanently re-assume the Chief Financial Officer role.
The Children's Place appears to have had a strong third quarter. The company raised same-store (comparable) sales guidance to high-single digit growth from its previous mid-single digit forecast.
The company reaffirmed Q3 EPS guidance of $2.97-3.07, which represents 17% year/year growth at the midpoint. Importantly, the company also noted that inventory is in great shape entering the all-important holiday season that kicks off later this month.
The Children's Place did not update guidance for the year, but last quarter, the company raised fiscal year EPS guidance to $8.09-8.29 from the $7.95-8.20 estimates indicated prior after cold weather in the first quarter (comp sales fell 1.8%) was more than made up for with strong results in the second quarter (comps grew 13.2%). The Children's Place expects mid-single digit comp store sales growth for the year on top of 5.8% growth last year.
The Children's Place has a $2.3 bln valuation and trades at 17x earnings estimates, which is on par with a broad average of publicly traded retailers.
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