Children's Place's (PLCE) sales and margins are expected to remain under pressure, UBS analysts said in a Tuesday note.
Analysts said they are cautious on the pace of the company's earnings per share recovery, but note that lower inventory, improved cash use, and potential for further cost savings offset some of its weak operating trends.
UBS said that the company's Q2 results faced challenges, as sales declined 19% due to weaker direct-to-consumer demand and lower wholesale shipments.
Analysts said that while the company noted improvements in August traffic and rebuilding of wholesale inventories, they are waiting to see if the stabilization is sustainable.
UBS has a neutral rating and a $3.25 price target on the stock.
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