Children's Place Inc. was downgraded to neutral from outperform at Wedbush, with analysts saying the retailer's growing e-commerce business puts margins at risk. "We do not see the structural shift to digital slowing in the near-term, and without a strategy in place to raise the e-commerce margin contribution, we see the mix shift continuing to drag on margins going forward," analysts led by Jen Redding wrote. Wedbush thought the Gymboree bankruptcy would give the company's stock a boost, but now think the stock will stay "grounded in the near term" due to depressed gross margin. Children's Place stock plummeted 23% in Wednesday trading after it reported a third-quarter sales miss. Shares slipped 0.6% in Thursday premarket trading, and are down 46.3% over the past year. The S&P 500 index is up 18.5% for the last 12 months.
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