Childrens behavior

Here’s why Children’s Place (PLCE) is ahead of the industry

Children’s Place, Inc. PLCE, one of the widely recognized names in the Retail – Clothing and Footwear industry, has shown an outstanding run on the stock exchanges over the past year. During that time, shares of this company Zacks Rank # 1 (Strong Buy) jumped about 52.6% against an industry decline of 10.5%. Digital transformation, superior product assortment, and high demand – as people return to active social lifestyles – have helped generate income. You can see The full list of today’s Zacks # 1 Rank stocks here.

This specialty children’s clothing retailer continued to perform decently in the third quarter of fiscal 2021. The significant structural changes to the business and the incremental digital investments made before the pandemic continue to drive optimistic performance. Undoubtedly, a favorable response to the product assortment, higher price realization and lower promotional activity acted as favorable winds.

let’s analyze

The Children’s Place has aggressively strategized and made planned investments to meet consumer demand and behavior. He focused on a superior product strategy to resonate well with Millennial customers as well as advancing omnichannel capabilities. In this regard, the launch of a new brand of clothing, footwear and fashion accessories for tweens, Sugar & Jade, is worth mentioning. We note that Sugar & Jade is a digital-only brand and the first brand available on The Children’s Place’s new Salesforce e-commerce platform. The company also launched Afterpay, a Buy It Now, Pay Later option for its customers.

Impressively, the $ 50 million investment in the company’s digital transformation is paying off. Digital sales accounted for 45% of total net sales in the third quarter, with over 71% of digital sales via a mobile device. The company aims for 50% annual steady-state digital penetration. Consolidated digital sales jumped 36% in the third quarter. Digital sales jumped 40% in the United States and 2% in Canada.

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With the changing purchasing habits of consumers, the company has strived to reduce its reliance on the physical platform and move towards digitalization. At the start of fiscal 2022, the company aims to generate 75% of its total revenue from sources outside of traditional shopping malls.

With respect to its store inventory optimization strategy, The Children’s Place permanently closed 47 stores during the nine-month period ended October 30, 2021. Five locations were closed during the third quarter. Following favorable lease negotiations, the company now plans to close 275 stores since the start of fiscal 2020, compared to its previously planned target of 300 closures. The company’s current plan is to close an additional 50 stores in the last quarter.

Wrap

The Children’s Place started the fourth quarter on a strong note and remains on track to accelerate its operating margin expansion in fiscal 2021 and beyond. Zacks’ consensus estimate for the company’s sales and earnings per share (EPS) for the current year suggests growth of 27.4% and 464.9%, respectively, from a year ago .

Also choose these 3 actions

Some other top ranked stocks are Boot Grange Holdings BOOT, Tapestry TPR and Target TGT.

Boot Barn Holdings, the lifestyle retailer of Western and work footwear, clothing and accessories, is ranked # 1 from Zacks. BOOT posted a surprise earnings of 35.3% on average over the past four quarters.

Zacks ‘consensus estimate for Boot Barn Holdings’ current year sales and EPS suggests growth of 54.6% and 188%, respectively, from the prior year period.

Tapestry, which provides luxury accessories and branded lifestyle products, is ranked # 1 in Zacks. The company has achieved a surprise of 29% on average over the last four quarters.

Zacks’ consensus estimate for Tapestry’s sales and EPS for the current year suggests growth of 14.8% and 17.9%, respectively, from the prior year period. TPR has an expected EPS growth rate of 12.3% over three to five years.

Target, a general merchandise retailer, carries a Zacks Rank # 2 (Buy). The company has achieved a surprise profit of 19.7% on average over the past four quarters.

Zacks’ consensus estimate for Target’s sales and EPS for the current year suggests growth of 13.9% and 40%, respectively, from the prior year period. TGT has an expected EPS growth rate of 14.4% over three to five years.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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