The stock price of J.C. Penney Company, Inc. (NYSE:JCP) surged by more than 3 percent to $18.29 per share on Monday around 11:13 A.M. in New York. The uptick was driven by a report from analysts at Cleveland Research that the discounts implemented by the company increased customer traffic in stores and improved its sales performance this month.
J.C. Penney Company, Inc. (NYSE:JCP)’s stock went up as much as $19.03 per share in the early morning trading, and it is considered as one of the top gainers of the S&P 500. The stock value of the department store chain already increased by 13 percent this month since it reported its first quarter earnings performance with a better-than-expected cash balance.
Since the return of Mike Ullman as chief executive officer of the company last month, the stock price of J.C. Penney Company, Inc. (NYSE:JCP) climbed by 32 percent, which indicates that investors have confidence in his leadership.
Last year, revenue of J.C. Penney Company, Inc. (NYSE:JCP) declined by 25 percent to $13 billion under the management of Ron Johnson, who implemented strategies to transform the century-old department store chain. Johnson made big mistakes such as replacing coupons and sales with everyday low prices, which drove customers away and resulted in poor earnings results particularly in the fourth quarter of 2012.
Ullman immediately repaired the situation. J.C. Penney Company, Inc. (NYSE:JCP) released an advertisement on television apologizing to customers regarding its mistakes, and encouraged them to come back as it returned coupons and promotions.
Cleveland Research analysts reported that the department store chain experienced “significant” customer traffic and sales increase early this month. According to them, advertisements in newspapers and aggressive coupon promotions boosted the sales of J.C. Penney Company, Inc. (NYSE:JCP). They also observed that customers responded positively to the company’s marketing campaign.
During its Mother’s Day sales event this weekend, J.C. Penney Company, Inc. (NYSE:JCP) used the term “doorbusters’ and offered a 40 percent savings to attract shoppers. Generally, stores use doorbusters during Black Friday and Thanksgiving sales events because they offer huge discounts.
Meanwhile, analysts and investors are waiting to get an official update regarding the strategies of the company since Ullman’s return. Deborah Weinsig, analyst at Citigroup Inc (NYSE:C) said, “We expect the company to outline its new pricing, merchandising, and marketing strategies. We will also be listening for an update on the talent brought in to assist Mike Ullman with the turnaround."
Gilford Securities analyst Bernard Sosnick expects Ullman to report positive news regarding J.C. Penney’s sales performance on Mother’s Day. He said, "Penney’s apology, promotions and coupons have brought shoppers into the stores. There might be positive sales in 2Q/13.”