Wall Street Signals to J. C. Penney (JCP) CEO - 'Your Policy Sucks'
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Price: $0.18 --0%
Rating Summary:
1 Buy, 21 Hold, 11 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 13 | New: 19
Rating Summary:
1 Buy, 21 Hold, 11 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 13 | New: 19
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Shares of J. C. Penney (NYSE: JCP) are rocking 7.6 percent higher Thursday while the sector as a whole is flat, as represented by sector ETF SPDR S&P Retail (NYSE: XRT). This has market watchers scratching their head.
It appears that investors may be happy that CEO Ron Johnson is going back on his word about something very important... coupons.
In the past Johnson called coupons "drugs" and vowed to due away with them, instead going for an everyday low price strategy. This led to a 20 percent decline in sales and a flailing stock price.
Today, an e-mail from CEO Johnson went out "A Letter And Gift From Our CEO." In the letter a $10 coupon was offered as an incentive to get customers to visit the stores.
J. C. Penney, for its part, said the e-mail was a "gift", not a coupon. "This invitation is in no way a reflection of a departure from our fair and square everyday low prices", a company spokesperson said.
But that's not how industry watchers see it.
"$10 off is a coupon in our book," Deutsche Bank retail analyst Charles Grom said. "In our view, this serves as another admittance that the EDLP strategy transition continues to be difficult and on the heels of a month-long kids haircut giveaway in August, it shows that the management team is actually willing (and looking) for promotions that will aid the store draw traffic."
He see more coupons and promotions as we approach the holiday season. "As we approach Black Friday and the Holiday period, we would not be surprised to see additional coupons and promotional events provided by JCP."
Deutsche Bank is maintaining a Hold and $18 price target on JCP.
For an analyst ratings summary and ratings history on J. C. Penney click here. For more ratings news on J. C. Penney click here.
Shares of J. C. Penney closed at $24.15 yesterday.
It appears that investors may be happy that CEO Ron Johnson is going back on his word about something very important... coupons.
In the past Johnson called coupons "drugs" and vowed to due away with them, instead going for an everyday low price strategy. This led to a 20 percent decline in sales and a flailing stock price.
Today, an e-mail from CEO Johnson went out "A Letter And Gift From Our CEO." In the letter a $10 coupon was offered as an incentive to get customers to visit the stores.
J. C. Penney, for its part, said the e-mail was a "gift", not a coupon. "This invitation is in no way a reflection of a departure from our fair and square everyday low prices", a company spokesperson said.
But that's not how industry watchers see it.
"$10 off is a coupon in our book," Deutsche Bank retail analyst Charles Grom said. "In our view, this serves as another admittance that the EDLP strategy transition continues to be difficult and on the heels of a month-long kids haircut giveaway in August, it shows that the management team is actually willing (and looking) for promotions that will aid the store draw traffic."
He see more coupons and promotions as we approach the holiday season. "As we approach Black Friday and the Holiday period, we would not be surprised to see additional coupons and promotional events provided by JCP."
Deutsche Bank is maintaining a Hold and $18 price target on JCP.
For an analyst ratings summary and ratings history on J. C. Penney click here. For more ratings news on J. C. Penney click here.
Shares of J. C. Penney closed at $24.15 yesterday.
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