1 Reason I Don't Trust J.C. Penney's Management

When department store chain J.C. Penney (NYSE: JCP) reported its latest results last month, the headline of its press release read "JCPenney Reports a 1.5 Percent Increase in Total Net Sales for the Second Quarter." That sounds good on the surface -- J.C. Penney and all department stores have been struggling with weak sales for years.

But comparable sales, a measure of sales only counting stores that were around a year ago, slumped 1.3%. The total number of stores also declined, dropping to 1,011 at the end of the quarter, down from 1,014 at the same time last year. Where did this sales growth come from?

J.C. Penney announced earlier this year plans to close over 100 stores. The stores were shut down in August, after the end of the second quarter, but the liquidation process played out during the second quarter. The proceeds from these liquidation sales, which were excluded from the comparable sales figures, were more than enough to produce revenue growth.

Continue reading

Source: Fool.com