What led Investors panic on Childrens Place Inc (NASDAQ: PLCE) stock

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Childrens Place Inc (NASDAQ: PLCE) stock plunged 23.14% on December 11th, 2019 (Source: Google fiannce) after GlobalData Retail proposed that Target Corp. could derail the relaunch of Gymboree in spring 2020. The company has also reported a third-quarter sales miss and cut its guidance. The company has reported the net income of $43 million, down from $49.9 million of last year. The retailer faced a number of headwinds that includes the warm weather into late October. Weak quarter-to-date mall traffic has prompted the company to cut its guidance in the fourth quarter. On the other hand, the Company had opened six stores and closed 12 stores in the three months ended November 2, 2019. The Company has ended the third quarter with 955 stores and square footage of 4.5 million, which is a decline of 3.2% compared to the prior year.

PLCE in the third quarter of FY 19 has reported the adjusted earnings per share of $3.03, beating the analysts’ estimates for the adjusted earnings per share of $3.02, according to FactSet consensus. The company had reported the adjusted revenue growth of 0.4 percent to $524.8 million in the third quarter of FY 19, missing the analysts’ estimates for revenue of $534 million. Same-store sales were up 0.8%, well below the 3.5% growth FactSet forecast.

Additionally, during the quarter, the Company had repurchased 414 thousand shares for approximately $33 million and paid a quarterly dividend of approximately $9 million, or $0.56 per share, in the quarter.

The company now expects sales to be in the range of $504 million to $509 million, which is a mid-single digit same-store sales decline and adjusted EPS is expected to 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 for full fiscal year expects the sales to be in the range of $1.862 billion to $1.867 billion, a 3% same-store sales decline, and adjusted EPS to be in the range of $5.00 to $5.20. The EPS guidance includes an adverse tariff impact of 13 cents per share. FactSet is projecting the sales to be of $1.92 billion, same-store sales growth to be of 0.3% and EPS to be of $5.62.

Meanwhile, the company had won the Gymboree intellectual property at auction in March with a $76 million bid. Gymboree filed for bankruptcy in January, and sold the Jack & Janie brand to Gap Inc. The company now intends to launch Gymboree with an enhanced website and more than 200 shop-in-shop locations in spring 2020.

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