The Children’s Place, Inc.’s PLCE board has approved a quarterly dividend hike of 12%, marking its fifth straight year of dividend increase. This reflects a dividend of 56 cents per share compared with the prior dividend rate of 50 cents. The hiked dividend will be payable on Apr 26, 2019, to shareholders of record as of Apr 15, 2019.
The company boasts a good history of returning excess value to shareholders in forms of dividends and share repurchases. In this regard, Children’s Place has already bought back shares worth nearly $1.1 billion since 2009 and paid roughly $100 million in dividends since 2014. Further, the company expects to repurchase around $500 million of shares over the next three years.
We note that shares of this company have lost 8.5% in the past month, underperforming the industry’s decline of 2.2%. This bearish run for this Zacks Rank #5 (Strong Sell) stock can be attributable to the company’s lower-than-expected fourth-quarter fiscal 2018 results, wherein both top and bottom lines declined on a year-over-year basis. The company’s bleak fiscal 2019 view on account of unforeseen challenges, owing to the bankruptcy of its rival, Gymboree and a very late Easter also affected the outlook.
Management now anticipates adjusted earnings of $5.25-$5.75 per share for fiscal 2019, down from $6.75 reported in fiscal 2018. The Zacks Consensus Estimate for the fiscal year is currently pegged at $5.67, which is above the mid-point ($5.50) of the bottom-line view.
Children's Place also envisions total net sales in fiscal 2019 to be $1,890-$1,915 million, down from $1,938.1 million recorded in fiscal 2018. The company forecasts comparable retail sales to be flat to down 1%.
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