J. C. Penney Company
) posted a second-quarter 2012 loss of $0.37 per share that fared
worse than the earnings of $0.19 in the year-ago quarter and the
Zacks Consensus Estimate of loss of $0.24. Following disappointing
quarterly results, the company hinted that it will not achieve its
earlier guidance of $2.16 per share for fiscal 2012. Total revenue
also fell 22.6%, whereas comp sales slid 21.7%.
We observe that despite a well-diversified supplier base, the
company has been struggling against other retail chains. In order
to uplift itself and to become America's favorite store, J. C.
Penney announced slew of measures, which include new pricing
strategy, fresh logo, strategic merchandise initiatives, cost
reduction and enhancement of customers shopping experience.
However, the dismal results dashed those hopes at least for the
near term. Moreover, an erratic consumer behavior and a sluggish
economic recovery still remain matters of concern. Consequently, we
downgrade our recommendation on the stock to Underperform.
PENNEY (JC) INC (JCP): Free Stock Analysis
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