UPDATE: Goldman Sachs Downgrades Children's Place Retail Stores to Neutral

Goldman Sachs has published a research report on The Children's Place Retail Stores (NASDAQ: PLCE) and has downgraded the company from Neutral to Buy.

In the report, Goldman Sachs writes, "On January 5, PLCE lowered 4Q11 EPS guidance to $0.85-$0.90 (including a new $0.16 tax benefit) vs. $1.19-$1.24 prior. While comps made plan, the gross margin is down about 470 bp due to warm weather, higher input costs, and competitive landscape. While we have been aware of these factors, this call has not worked out as we expected, as we believed that PLCE's “retail 101” process changes would be a margin offset. However, the margin expansion story from these initiatives is not materializing as we anticipated in magnitude and timing. Since our 9/29/2010 launch at Buy, PLCE is +1% vs. SPX +12%. Over 12 months, PLCE is +5% vs. SPX flat."

Goldman Sachs has also lowered the price target from $58 to $51 on Children's Place Retail Stores, which is currently trading down $0.88 form yesterday's $49.58 closing price.