J. C. Penny's Sales Up, Guides High - Analyst Blog
May 10 2011 - 4:15AM
Zacks
J. C. Penney Company
Inc. (JCP), one of the leading retailers, recently
reported its sales results for the four-week period ended April 30,
2011. The company's comparable-store sales for April 2011 increased
6.4% with total sales growing 3.4% to $1,261.0 million.
The sales results were positively
impacted by the ongoing success of the strategic initiatives taken
by the company, including Call it Spring by The ALDO, Liz Claiborne
and Claiborne Group coupled with the value offered by its power
private brands.
During the period under review, The
Plano, Texas-based J. C. Penney registered significant
comparable-store sales growth across women's and children's attire
with the southeast region recording maximum sales.
Following the sales results,
management now expects first-quarter 2011 earnings of 24 cents up
from its earlier guidance range of 18 cents to 23 cents a
share.
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 its market
share.
Moreover, the in-store Sephora
departments continue to attract younger and more affluent
customers. Theseare part of J. C. Penney's strategy to gain
competitive advantage over the 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.
The company has been focusing on
remodeling, renovating and refurbishing of its stores in order to
create a soothing shopping experience for the consumers. Therefore,
it also refreshes its website functionality, keeping in mind
continued migration to online shopping.
We also remain confident about J.
C. Penney's top-line growth based on compelling new merchandise and
launch of JCP Rewards program.
Currently, we have a long-term
'Outperform' rating on the stock. However, J. C. Penney, which
competes with Macy's Inc. (M)
and Kohl's Corporation (KSS), holds a
Zacks #3 Rank, which translates into a short-term 'Hold'
recommendation.
PENNEY (JC) INC (JCP): Free Stock Analysis Report
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