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Children’s Place stock plummets 17% after sales miss, guidance cut

Children’s Place Inc. stock plummeted 17.6% in Wednesday premarket trading after the retailer reported a third-quarter sales miss and cut its guidance. Net income totaled $43.0 million, or $2.77 per share, down from $49.9 million, or $3.03 per share, last year. Adjusted EPS of $3.03 was ahead of the $3.02 FactSet consensus. Sales of $524.8 million were up from $522.5 million but missed the $534.0 million FactSet consensus. Same-store sales were up 0.8%, well below the 3.5% growth FactSet forecast. The retailer faced a number of headwinds, including warm weather into late October, according to a statement from Chief Executive Jane Elfers. Weak quarter-to-date mall traffic has prompted a guidance cut in the fourth quarter. The company now expects sales in the range of $504 million to $509 million, a mid-single digit same-store sales decline and adjusted EPS in the range of $1.48 to $1.68. The FactSet consensus is for sales of $555.1 million, same-store sales growth of 4.3% and EPS of $2.06. Children’s Place is guiding for full fiscal year sales in the range of $1.862 billion to $1.867 billion, a 3% same-store sales decline, and adjusted EPS in the range of $5.00 to $5.20. The EPS guidance includes an adverse tariff impact of 13 cents per share. FactSet is guiding for sales of $1.92 billion, same-store sales growth of 0.3% and EPS of $5.62. The company says it’s on track to relaunch Gymboree in early 2020 with an e-commerce site and shop-in-shop locations at 200 Children’s Place stores in the U.S. and Canada. Children’s Place stock has fallen 29.2% over the past year while the S&P 500 index is up 18.8% for the period.

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