Beleaguered retailer J C Penney once again proves its detractors wrong. This holiday season had been seen as “make or break” for the iconic consumer retail chain, but analysts had not been optimistic with holiday sales estimates ranging from down 5% to up less than 1%. Fortunately for bondholders and shareholders, J C Penney blew these low estimates out of the water, chalking up a solid 3.7% sales increase from the prior year for the nine-week November/December holiday period.
Moreover, showing a continuation of the strong holiday sales trend into January, J C Penney expects to report total sales are up by close to 4% for the full fourth quarter.
J C Penney: Part strong holiday season, part good product selection
In a January 7th blog post, Walter Loeb of Forbes suggests that J C Penney’s strong holiday season sales stem from both a smart product selection from management and riding on the coat-tails of a strong holiday season for most retailers.
Loeb said that this holiday season seems to have been divided into a strong start with Thanksgiving/Black Friday, then a notable slowdown followed by a last week before Christmas buying frenzy. He notes that J C Penney execs deserve credit for sticking to their plans and not moving to major markdowns when things slowed down after the Black Friday weekend.
Nine-week figures relieve investor anxiety
Loeb also praised J C Penney management for taking the initiative to post nine-week holiday sales figures. “I hope that Macy’s, Nordstrom, Kohl’s, and others, will follow J C Penney’s lead and release nine-week figures as well. As I have published in several recent blogs, I believe that retail sales for the Holiday period will come in up around 4%–although some people have become more bullish, suggesting the industry increase could be as much as 5 to 5½% for the season. That would make 2014 one of the best Holiday seasons in many years. Yes Virginia, there is a Santa Claus.”