We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will J. C. Penney's (JCP) Turnaround Efforts Boost Sales?
Read MoreHide Full Article
J. C. Penney Company, Inc. is leaving no stone unturned to boost the optimism of customers and investors. In this regard, the company had previously undertaken initiatives to change logo, store designs, advertisements, brand makeover, enhancement of omni-channel capabilities, strategic partnerships and pricing model to attract consumers. It has also exited the appliance business to focus on core categories.
In spite of these efforts, the company didn’t attain the desired results. Notably, the company witnessed soft sales trend in second-quarter fiscal 2019. Also, the company’s top line lagged the Zacks Consensus Estimate in three of the trailing four quarters. Moreover, the company’s top line has declined year over year. Also, comps in the quarter declined 9% due to the company’s exit from major appliance and in-store furniture categories. This compelled comps to decline 300 basis points (bps).
We note that the company received a notification from the NYSE with respect to its listing status. The company is trading below the minimum requirement of $1 for a while. This exposes it to the risk of being delisted.
A Ray of Hope
Although there is little scope for J. C. Penney to improve, some investors have still not lost hope. Fortunately, the company has been able to drive gross profit margin and lower overhead expenses during the fiscal second quarter. Moreover, it is on track to reduce inventory level that is a key catalyst for its merchandise profit margin. Moving on, the company reintroduced coupons to revive sales.
Apart from these, CEO Jill Soltau made considerable alterations in leadership as part of J. C. Penney’s turnaround endeavors. The company also launched a store checkout process, which is likely to streamline operations and improve customer experience. To this end, it has tested a centralized pickup in returns to improve in-store experience and omni-channel customer experience. In the fiscal second quarter, management rolled out this concept in nearly 500 stores.
Going ahead, the company intends to invest more in women’s apparel. Moreover, J.C. Penney teamed up with thredUP to offer second-hand women’s clothing and handbags. It is on track to roll out thredUP shops across 30 stores.
Recently, the company launched an in-house brand — St. John’s Bay Outdoor — within the men’s department in stores. Apart from this, it is set to introduce an Outdoor Shop featuring St. John’s Bay Outdoor along with three new product lines — American Threads, The American Outdoorsman and HI-TEC. The launch is being considered as a revival attempt by J. C. Penney to boost sales. Backed by such efforts, shares of this Zacks Rank #3 (Hold) company have surged 59.4% in the past month compared with the industry’s growth of 10.5%.
Wrapping Up
All said, it is yet to be seen whether the Soltau can revive the 117-years-old business with his merchandising expertise and offset dwindling sales.
Zumiez (ZUMZ - Free Report) has a long-term earnings growth rate of 13.5% and a Zacks Rank #1.
Canada Goose Holdings (GOOS - Free Report) has a long-term earnings growth rate of 28.5% and a Zacks Rank #2 (Buy).
5 Stocks Set to Double
Zacks experts released their picks to gain +100% or more in 2020. One is a famous cutting-edge food company that is “hiding in plain sight.” Swamped with competitors and ignored by Wall Street, its stock price floundered. Now, suddenly, it acquired a company that gives it an advantage none of its peers have.
Image: Bigstock
Will J. C. Penney's (JCP) Turnaround Efforts Boost Sales?
J. C. Penney Company, Inc. is leaving no stone unturned to boost the optimism of customers and investors. In this regard, the company had previously undertaken initiatives to change logo, store designs, advertisements, brand makeover, enhancement of omni-channel capabilities, strategic partnerships and pricing model to attract consumers. It has also exited the appliance business to focus on core categories.
In spite of these efforts, the company didn’t attain the desired results. Notably, the company witnessed soft sales trend in second-quarter fiscal 2019. Also, the company’s top line lagged the Zacks Consensus Estimate in three of the trailing four quarters. Moreover, the company’s top line has declined year over year. Also, comps in the quarter declined 9% due to the company’s exit from major appliance and in-store furniture categories. This compelled comps to decline 300 basis points (bps).
We note that the company received a notification from the NYSE with respect to its listing status. The company is trading below the minimum requirement of $1 for a while. This exposes it to the risk of being delisted.
A Ray of Hope
Although there is little scope for J. C. Penney to improve, some investors have still not lost hope. Fortunately, the company has been able to drive gross profit margin and lower overhead expenses during the fiscal second quarter. Moreover, it is on track to reduce inventory level that is a key catalyst for its merchandise profit margin. Moving on, the company reintroduced coupons to revive sales.
Apart from these, CEO Jill Soltau made considerable alterations in leadership as part of J. C. Penney’s turnaround endeavors. The company also launched a store checkout process, which is likely to streamline operations and improve customer experience. To this end, it has tested a centralized pickup in returns to improve in-store experience and omni-channel customer experience. In the fiscal second quarter, management rolled out this concept in nearly 500 stores.
Going ahead, the company intends to invest more in women’s apparel. Moreover, J.C. Penney teamed up with thredUP to offer second-hand women’s clothing and handbags. It is on track to roll out thredUP shops across 30 stores.
Recently, the company launched an in-house brand — St. John’s Bay Outdoor — within the men’s department in stores. Apart from this, it is set to introduce an Outdoor Shop featuring St. John’s Bay Outdoor along with three new product lines — American Threads, The American Outdoorsman and HI-TEC. The launch is being considered as a revival attempt by J. C. Penney to boost sales. Backed by such efforts, shares of this Zacks Rank #3 (Hold) company have surged 59.4% in the past month compared with the industry’s growth of 10.5%.
Wrapping Up
All said, it is yet to be seen whether the Soltau can revive the 117-years-old business with his merchandising expertise and offset dwindling sales.
Stocks to Consider
Boot Barn Holdings (BOOT - Free Report) has a long-term earnings growth rate of 17% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Zumiez (ZUMZ - Free Report) has a long-term earnings growth rate of 13.5% and a Zacks Rank #1.
Canada Goose Holdings (GOOS - Free Report) has a long-term earnings growth rate of 28.5% and a Zacks Rank #2 (Buy).
5 Stocks Set to Double
Zacks experts released their picks to gain +100% or more in 2020. One is a famous cutting-edge food company that is “hiding in plain sight.” Swamped with competitors and ignored by Wall Street, its stock price floundered. Now, suddenly, it acquired a company that gives it an advantage none of its peers have.
Today, see all 5 stocks with extreme growth potential >>