J. C. Penney Company, Inc.
) nosedived 13.2% to close at $9.05 on Friday, Sep 27, when it
reached a 52-week low of $8.85 in the day's session. The stock's
year-to-date performance is also disappointing, as it has plunged
56.6%. It seems that this beleaguered S&P 500 retail chain
operator has lost investors' confidence, and given the numerous
challenges that the company faces at present, the stock has more
The department store's public offering of 84 million shares at
a price of $9.65 per share plus an additional 12.6 million shares
in case of excess demand, failed to calm investors' jitters just
ahead of the holiday season. The offering will conclude
J. C. Penney has been in troubled waters for quite some time,
and has been grappling with waning revenues and higher losses.
The company has not shown any signs of recovery in the recent
past. This is evident from its 7th consecutive quarter of
sluggish results on Aug 20. The company has been constantly
lagging its peers,
) in terms of performance.
The company remained in the red with adjusted loss per share
of $2.16 in the second quarter of fiscal 2013 that widened from
the loss of 37 cents in the year-ago quarter. The Zacks Consensus
Estimate for the quarter was a loss of $1.13 per share. Top line
plunged 11.9% to $2,663 million and fell short of Zacks Consensus
Estimate. Looking at the company's earnings surprise history, J.
C. Penney has missed the Zacks Consensus Estimate by an average
of about 523.2% in the trailing four quarters.
However, this Zacks Rank #3 (Hold) stock has taken several
strategic initiatives to drive traffic and conversion. The
company reverted to promotions, which could be a successful sales
driver this holiday season.
Investors remain cautious about the stock, as the company
endeavors to recoup and give itself a major facelift. In a
significant development, the company's board of directors in Apr
2013 discharged the Chief Executive Officer (CEO) Ron Johnson of
his duties after 17 months, as his ambitious transformational
ideas failed to materialize. Consequently, the company's former
CEO, Myron E. (Mike) Ullman, III was reinstated in his post.
However, we have to wait and see if the initiatives undertaken
to revive the stock are successful.
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