Retail

JC Penney Short Interest Slips to 81 Million Shares

Douglas A. McIntyre

Published: July 13, 2016 8:40 am

Last Updated: January 13, 2020 5:47 am

J.C. Penney Co. Inc.’s (NYSE: JCP) prospects may be slightly better than those of Macy’s Inc. (NYSE: M) and Sears Holdings Corp. (NASDAQ: SHLD). However the short interest in its shares stood at 81.9 million, which is 27% of its float, as of the 15-day period that ended on June 30.

Macy’s prospects are so poor that its chief executive officer is leaving. Sears continues to lose huge amounts of money and serially close locations. J.C. Penney trades at the lower end of its 52-week range at $8.60, on a high and low of $11.99 and $6, respectively.

J.C. Penney recently missed revenue forecasts, coming in at $2.81 billion in the most recently reported quarter. However, CEO Marvin Ellison affirmed his company’s full year guidance. He is one of the few retail executives to do so. Unlike many retailers, he has not decided to shutter a large number of locations.

The primary knock on J.C. Penney is that, like for all other retailers, it lives in a shadow cast by Amazon.com Inc. (NASDAQ: AMZN). Amazon’s recent Prime day was described as a success, despite the attempts by other retailers to steal its customers.

As J.C. Penney released its most recent quarterly results, Ellison said:

The first quarter was clearly challenging from a sales perspective. Although our business was not immune to the issues facing other retailers, I am pleased that we were able to deliver our second consecutive quarter of positive operating profit. In addition, the teams did an excellent job of proactively managing the business throughout the quarter to ensure we remained a fiscally disciplined organization. As a result, we exceeded our profitability expectations, achieving a 63 % increase in EBITDA to $176 million for the quarter.

That is a very tiny number when compared to the company’s revenue for the same period.