J. C. Penney Sales Dropped - Analyst Blog
April 11 2011 - 4:00AM
Zacks
J. C. Penney Company
Inc. (JCP), one of the leading retailers, recently
reported its sales results for the five-week period ended April 02,
2011. The company’s comparable-store sales for March 2011 inched
down 0.3% with total sales plummeting 4.0% to $1,467.0 million.
The sales results were negatively
impacted due to the shift in Easter holiday to April 24 this year
from April 4 in the prior year.
During the period under review, The
Plano, Texas-based J. C. Penney registered comparable-store sales
growth across jewelry, women's attire and accompaniments with the
southwest region recording maximum sales.
As announced earlier, the company
extended its ‘MNG by Mango’ and ‘Call it Spring by the ALDO Group’
brands to 292 and 100 J. C. Penney stores, respectively.
J. C. Penney’s well diversified
supplier base, compelling private and national brands, marketing
campaigns, point-of-sale technology initiatives as well as
effective cost and inventory management should bode well for sales
and margin trends over the long term. The company also remains on
track to deliver comparable-store sales growth and boost market
share.
Moreover, the in-store Sephora
departments continue to attract younger and more affluent
customers. These are part of J. C. Penney's strategy to gain
competitive advantage over drug stores, which gave their cosmetic
sections facelifts in the recent years. The Sephora concept
instigates confidence and is expected to be a significant revenue
driver. Hence, the company plans to open 21 Sephora stores in
April.
The company has been focusing on
remodeling, renovating and refurbishing its stores in order to
enhance customers’ shopping experience. To that end, it also
refreshes its website functionality, keeping in mind continued
migration to online shopping.
We remain confident about J. C.
Penney’s top-line growth based on compelling new merchandise and
launch of JCP Rewards program. Management provided guidance for
total sales growth in the low single-digit range and earnings
between $2.00 and $2.10 for fiscal 2011.
Currently, we have a long-term
‘Outperform’ rating on the stock. Moreover, J. C. Penney, which
competes with Macy’s Inc. (M) and Kohl’s
Corporation (KSS), holds a Zacks #1 Rank, which translates
into a short-term ‘Strong Buy’ recommendation.
PENNEY (JC) INC (JCP): Free Stock Analysis Report
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