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How Will JC Penney Navigate Through the Holiday Season?

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J. C. Penney Company, Inc.JCP has taken up several strategic initiatives to drive traffic. The company, in order to enhance customer shopping experience, has been focusing on remodeling, renovating and refurbishing its stores with special focus on improving the high-margin center core department that houses handbags, fashion accessories, sunglasses and fashion jewelry. It is also overhauling its shoe department to bring in more female customers.

We believe J. C. Penney's promotional strategies could be a successful sales driver in the upcoming holiday season. Moreover, we perceive J. C. Penney's efforts to further the reach of national as well as private-label brands, through effective marketing campaigns and point-of-sale technology should help augment top-line performance. The company has also made investments to boost supply chain efficiency.

The Sephora stores within more than 515 J. C. Penney outlets continue to outperform by drawing more customers. In the second quarter, Sephora reported double-digits increases in comparable-store sales. These shops are part of J. C. Penney's strategy to gain competitive advantage over other beauty product retailers and drugstores, which have significantly enhanced their cosmetics sections in recent years.

J. C. Penney is making every effort to bring itself back to profitability, which the company has not tasted since 2011. However, the company's shares have gained more than 44% this year and 18.5% over the last one-month period.

Zacks Rank

JC Penny currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in this sector include Target Corp. TGT , Big Lots Inc. BIG and American Eagle Outfitters, Inc. AEO . All these stocks hold a Zacks Rank #2 (Buy).

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PENNEY (JC) INC (JCP): Free Stock Analysis Report

TARGET CORP (TGT): Free Stock Analysis Report

AMER EAGLE OUTF (AEO): Free Stock Analysis Report

BIG LOTS INC (BIG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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