I wonder if you have a view about PLCE (and if not, totally fine).
Some good points for the attractiveness were made by presentation from David Bastian in this pitch at MCC https://www.youtube.com/watch?v=wzOuWzjhsbg. Main driver is return of high cash flows to pre-covid levels when costs normalize again. Also revenue decline was less than inventory decline in the last 2 quarters, with improving GM%.
But on the other hand: Revenue has been declining yoy for quarters, PLCE continues to close stores, and leverage is significant. While management expresses optimism based on some anticipated improvements in cost basis - their statements don't matter much, because they have to convey optimism, especially with this leverage.
I am curious whether you have a view about PLCE, e.g. how you assess the potential vs. the risk / decline, and what is not reflected in the current valuation.
Thank you for the post.
I wonder if you have a view about PLCE (and if not, totally fine).
Some good points for the attractiveness were made by presentation from David Bastian in this pitch at MCC https://www.youtube.com/watch?v=wzOuWzjhsbg. Main driver is return of high cash flows to pre-covid levels when costs normalize again. Also revenue decline was less than inventory decline in the last 2 quarters, with improving GM%.
But on the other hand: Revenue has been declining yoy for quarters, PLCE continues to close stores, and leverage is significant. While management expresses optimism based on some anticipated improvements in cost basis - their statements don't matter much, because they have to convey optimism, especially with this leverage.
I am curious whether you have a view about PLCE, e.g. how you assess the potential vs. the risk / decline, and what is not reflected in the current valuation.