KSS Kohls Corporation

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
 
KOHLS CORP (KSS): Free Stock Analysis Report
 
MACYS INC (M): Free Stock Analysis Report
 
Zacks Investment Research