The numbers hadn’t changed, but the way investors were looking at those numbers surely did. The stock’s price has little to do with what the company actually does and a lot to do with what people either hope or think the company will do … someday. It did not happen on CEO Mike Ullman’s watch, however. Ullman becomes executive chairman of J.C. Penney’s board on August 1 and CEO-in-waiting Marvin Ellison takes over. The latest results were good enough to let Ullman leave on a high note.
The numbers were not good enough for analysts and investors to say that J.C. Penney has turned around. To be fair, retailers as a group are getting hammered these days. Macy’s Inc. (NYSE: M) performed poorly in the first quarter, and a dividend boost together with an increase in the buyback pool has not stopped the share price from falling. Macy’s missed on revenue and profit estimates Wednesday and same-store sales comparisons were negative.
Kohl’s Corp. (NYSE: KSS) also reported earnings Thursday morning, and it missed revenue estimates although it beat on profits. Same-store sales were up just 1.4%, another indication of weakness. Shares were pounded Thursday morning, down more than 11% at one point.
ALSO READ: The Most Popular Stores in America
Wednesday’s Census Bureau report on retail sales at department stores was not encouraging, and even though workers are receiving slightly better wages, they are not spending it. That is not necessarily bad news for J.C. Penney, but the store has not yet shown that it knows how to separate consumers from more of their cash.
The company seems to think that it can come up with a formula that will appeal to consumers Ullman identified as “Middle America” in Wednesday’s release. J.C. Penney is unwilling, it seems, to close more stores, and we have argued elsewhere that J.C. Penney’s debt service costs are high and that the company should just bite the bullet and close the stores.
J.C. Penney stock traded down nearly 5% in the noon hour Thursday, at $8.29 in a 52-week range of $5.90 to $11.30.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
