Can J.C. Penney Weather a Market Downturn?

At times it's seemed like J.C Penney (NYSE: JCP) would be a retail winner. The chain has made a number of strong moves, including adding appliances, offering home services in markets abandoned by Sears (NASDAQ: SHLD), and improving its in-store salons.

The problem is those efforts only partly succeeded. J.C. Penney has identified areas where it can succeed, including appliances and certain types of women's apparel, but it has also made some missteps. These forced the company to liquidate some inventory in Q3. That's actually good for comparable-store sales, which it expects to come in at 0.6% to 0.8%, but it's bad for profits, which will come in at a loss between $0.40 and $0.45 a a share.

The problem for J.C. Penney is that its path to finding a working business model has not been straight. That leaves the company, which predicts a mild profit between $0.02 and $0.08 a share, vulnerable to a market downturn.

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Source: Fool.com