Say What J.C. Penney Company, Inc. (NYSE:JCP)?

By: Brian Sozzi, CEO & Chief Equities Strategist of Belus Capital Advisors

 

J.C. Penney Company, Inc. (NYSE:JCP)’s loss per share report attempts to lure you in like the smile of a cute puppy does from afar. The company delivered what it laid out a couple weeks ago in terms of liquidity and same-store sales. Mike Ullman pounded his aging chest that the turnaround was progressing. But, when digging right into the core of this report and its assorted commentary, like that aforementioned cute puppy, it could pee on you if not careful to move out of the way.

 

J.C. Penney Company, Inc. (NYSE:JCP) Here is your early need to know list:

 

  • You have a holiday quarter held up by the company’s traffic-driving Sephora division (makeup needs to be replenished…) and a home division which was in full clearance mode throughout categories. Women’s apparel not a top-performing area, neither was children’s. These are two key divisions for the company, especially if it’s going to earn profits in must-shop periods such as back to school and the holidays.

 

J.C. Penney Company JCP
J.C. Penney Company JCP
  • J.C. Penney Company, Inc. (NYSE:JCP) expects to end 2014 with $2 billion in total liquidity, the same as it has started. So on a mid-single digit percentage comp (as guided to) JC Penney is not expected to improve its total liquidity year over year?

 

  • The fact remains: for J.C. Penney Company, Inc. (NYSE:JCP) to survive, JC Penney must be now transitioning to double digit percentage positive comps off year earlier comparisons AND renewed promotional activity in the store. FY14 guidance has outlined a mid-single digit positive comp.
  • We are unsure if the total liquidity number for 2014 includes any expected asset sales.