Children's Place (PLCE) Stock: Heading Up on Strong Guidance | Earnings Miss

Children’s Place Inc (NASDAQ: PLCE)

Children’s Place is having an incredibly strong day in the market today, and for good reason. The company reported its results for the second quarter before the opening bell this morning. While revenue came slightly ahead of expectations, earnings proved to be a miss. Nonetheless, investors are focused on strong guidance. Today, we’ll talk about what we saw from the quarter, how the stock reacted to the news, and what we can expect to see from PLCE moving forward. So, let’s get right to it…

PLCE Releases Q2 Results

As mentioned above, Children’s Place is having a strong day in the market today after reporting its financial results for the second quarter. Here’s what we saw from the report…

  • Earnings Per Share – In terms of earnings per share, PLCE unfortunately missed the mark. During the second quarter, analysts expected that the company would generate a loss of $0.23 per share. However the company actually reported that the loss for the second quarter came in at $0.33 per share. This missed expectations by $0.10 per share.
  • Revenue – While earnings proved to be a bit disappointing, revenue for the quarter proved to be a hit. During the second quarter, analysts expected that the company would generate revenue in the amount of $367.51 million. However, the company actually generated revenue in the amount of $371.4 million.
  • Guidance – With a big miss on earnings and a slight beat on revenue, PLCE needed something that would excite investors. Nonetheless, the strong guidance reported by the company did just that. During the earnings release, the company said that for the full year, it is expecting to generate earnings per share in the range between $4.60 and $4.70. This was incredible news as it proved to be a strong increase from previous guidance in the range between $4.17 and $4.27 per share.

How The Stock Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly traded company, we can expect to see gains in the value of the stock associated with the company. Adversely, when negative news is released, we can expect to see declines. In this particular case, the news was overwhelmingly positive. While earnings was a miss, there is an overwhelmingly positive outlook for the full year, and that’s exciting investors. As a result, we’re seeing gains in the value of the stock today. Currently (9:07), the stock is trading at $89.37 per share after a gain of $3.51 per share or 4.09% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from PLCE. While the company did miss expectations with regard to earnings, we saw a strong revenue quarter in the second quarter. However, as with most investors, what has me excited about this release isn’t necessarily revenue, it’s guidance. Considering the performance in the first half of the year, the company is clearly expecting to hit the ball out of the park in both of the quarters that are left. However, this idea isn’t out of reach. After all, we do have the holiday season ahead, and for a company like Children’s Place, that’s an incredibly important season. All in all, I’m expecting to see gains ahead.

What Do You Think?

Where do you think PLCE is headed moving forward and why? Join the discussion in the comments below!

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