Shares of pure-play children’s specialty apparel retail products provider Children’s Place, Inc. (PLCE) have slid 36% so far this year. The company’s recent fourth-quarter numbers were a mixed bag that failed to cheer up investors. Further, an uncertain outlook has also impacted stock prices.
While PLCE forecasts double-digit earnings per share and operating margin for fiscal 2022, a refrain from issuing a fiscal 2022 outlook has weighed on investor sentiment.
With these developments in mind, let us look at the changes in PLCE’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Children’s Place’s top two risk categories are Finance & Corporate and Ability to Sell, contributing six each, of the total 28 risks identified for the stock, compared to a sector average of 11 risk factors under the same category.
However, in its recent report, the company has added one key risk factor under the Ability to Sell risk category.
PLCE highlighted that it accepts payments via different methods such as cash, checks, credit and debit cards, ApplePay, PayPal, private label credit cards, gift cards, and Afterpay. This exposes the company to customer payment associated risks and various regulations and requirements, which can change over time or be reinterpreted.
Further, the potential for fraud and theft also remains. If the company fails to comply with various regulations, then it may face fines, higher transaction fees, and lose the ability to accept payments via certain modes, which may negatively impact its business, financials, and cash flow.
Hedge Fund Activity
According to TipRanks data, Wall Street’s top hedge funds have decreased holdings in Children’s Place by 310,900 shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 6 hedge funds.
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