The Secaucus, NJ-based company’s latest quarterly results are only adding to the shorts’ pain. PLCE posted much better-than-expected earnings this morning, beating Q2 estimates by a whopping $0.21 per share.
The company’s comparable sales results also exceeded expectations, raised its full-year outlook, and kept its quarterly dividend unchanged as well.
From the press release:
Jane Elfers, President and Chief Executive Officer, commented, “The continuation of the quarterly dividend is a further reflection of our confidence in our ability to execute on our strategic initiatives and our continuing commitment to return excess capital to shareholders. The Children’s Place has a profitable business model which generates strong cash flow. Since 2009, we have returned over $710 million to shareholders through dividends and share repurchases,” concluded Ms. Elfers.
The company continues to succeed despite strong short interest in its stock. According to ShortQueeze.com, more than 21% of the stock’s float is owned by short sellers:
This high short percentage means that more than one in five investors that own PLCE shares are betting on a share price decline. That puts the stock in the top 250 or so most shorted U.S. stocks on the three major exchanges.
Despite so many investors betting on a price drop, Children’s Place shares rose $0.71 (+0.83%) to $86.57 in Wednesday morning trading. PLCE has gained nearly 57% since the start of 2016, easily outpacing the S&P 500’s 7% gain in the same period — much to short sellers’ chagrin.
If PLCE keeps the gains up, a wave of short covering could well propel the stock even higher, as traders facing steep losses decide to exit their positions.