In a move to enhance its liquidity position at a time when it
is undergoing a phase of transformation to become America's
J. C. Penney Company, Inc.
) announced that it has expanded its borrowing capacity to $1.85
billion by amending its bank credit facility. The credit facility
also allows the department store chain to increase the borrowing
by another $400 million.
J. C. Penney is trying to remould itself from the way it had
operated before Ron Johnson took charge. In order to uplift
itself, the company announced an array of measures, which include
new pricing strategy, fresh logo, strategic partnership,
merchandise initiatives, cost reduction and enhancement of
customers' shopping experience.
The company intends to have a WiFi network and mobile POS in
all its stores. Moreover, the company is transforming its floor
selling space into a shop format.
However, these strategic initiatives are yet to show results
and for now this Zacks Rank #5 (Strong Sell) is on the verge of
completing fiscal 2012 on a soft note. J. C. Penney has long been
struggling to regain its lost market share, which has directly
impacted the company's financials. The company in the last 3
quarters has delivered a net loss, and missed the Zacks Consensus
Estimate in the last 4 quarters by an average of 328.2%.
J. C. Penney is scheduled to report its fourth-quarter fiscal
2012 results in the latter part of this month. The analysts
polled by Zacks project a loss of 13 cents a share and revenue of
$4,194 million for the quarter, which is worse than the
prior-year period, when the company posted earnings of 21 cents
and generated revenue of $5,425 million.
At present, J. C. Penney does not look like an attractive
opportunity for investment. However, there are other stocks in
the non-food retail-wholesale sector that are worth considering.
Abercrombie & Fitch Co.
American Eagle Outfitters, Inc.
), all hold Zacks Rank #2 (Buy) and are expected to continue with
their upbeat performances.
AMER EAGLE OUTF (AEO): Free Stock Analysis
ABERCROMBIE (ANF): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis
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