J.C. Penney Company, Inc. (JCP) Back in the Game, Comps Up 10%


It seems that J. C. Penney Company, Inc. (JCP) is gradually making a comeback as is evident from its comparable-store sales results for the month of November that surged 10.1%, despite consumer spending pressure. This Plano, Texas-based retailer hinted that it witnessed a significant improvement in its performance in the Thanksgiving weekend.

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Owing to this impressive performance, shares of this Zacks Rank #3 (Hold) stock rose approximately 4% to close at $10.47 during the aftermarket trading hours. Compelling merchandise and promotional strategies made leeway for J. C. Penney amid this competitive retail environment. Sales on jcp.com for the month under review also remained sturdy and well ahead of the prior-year level.

The robust November comparable-store sales results followed the upbeat sales results for the month of October. Comps rose 0.9% in October, increasing 490 basis points (bps) from September. We believe that J. C. Penney is steadily regaining a better foothold and putting up a strong competition against retailers such asMacy’s Inc. (M), Target Corporation (TGT) and Kohl’s Corporation (KSS).

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J. C. Penney has been in troubled waters for quite some time, given its waning revenues and increased losses. However, the company has taken several strategic initiatives to drive traffic and conversion. The company reverted to promotions, which could be a successful sales driver this holiday season.

J. C. Penney endeavors to recoup and give itself a major facelift seem to be paying off well as it posted narrower-than-expected loss for the third quarter of fiscal 2013. The company delivered a loss of $1.81 per share that fared better than the Zacks Consensus Estimate of a loss of $1.86 but widened from a loss of 93 cents in the year-ago quarter.

The quarterly sales tumbled 5.1% year over year to $2,779 million and also fell short of the Zacks Consensus Estimate of $2,794 million. Comps also decreased 4.8% but showed a sequential improvement of 710 bps. Online sales via jcp.com surged 24.5% to $266 million from the prior-year quarter.

CEO, Myron Ullman is trying all means to bring the company back on the growth trajectory, following the failure of the ambitious transformational ideas of Ron Johnson, who was discharged of his duties after 17 months in Apr 2013.

PENNEY (JC) INC (JCP): Free Stock Analysis Report

KOHLS CORP (KSS): Free Stock Analysis Report

MACYS INC (M): Free Stock Analysis Report

TARGET CORP (TGT): Free Stock Analysis Report

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