What Wasn't Said in J. C. Penney's (JCP) December Sales Release - Maxim Group
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Rating Summary:
1 Buy, 21 Hold, 11 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Maxim Group retail analyst Rick Snyder commented on J. C. Penney's (NYSE: JCP) December sales release, calling it "terse" with "no details whatsoever."
Snyder said what is not said is more important than what is said. What wasn't said, according to the analysts: "There was no quantification of December comps, compared with the prior sales release stating that November comps had risen by 10.1%. There was also no mention of traffic or conversion in the most recent release. The prior update stated that the traffic and conversion was "exciting for everyone across our organization."
The analyst highlights that while both months' releases stated that the company was "pleased" with its performance, it is apparently no longer "excited" about traffic and conversion trends.
J. C. Penney also reaffirmed its fourth quarter outlook, which set expectations of "positive" comp store sales. The analyst notes that comps could be slightly negative for both December and January and the quarter could still be positive. The one positive takeaway is that the company still expects to end the quarter with $2.0 billion in liquidity, he said.
As a result of the presumed deceleration in comps, the firm is maintaining a 3.0% comp estimate for Q4. "Given the calendar in this year's Q4, we expected industry wide comps to be strongest in November," Snyder comments. "Thus, we are not surprised that December was presumed to be lower than the 10.1% November comp; we would just like to know by how much."
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 are down 7.8% to $7.54.
Snyder said what is not said is more important than what is said. What wasn't said, according to the analysts: "There was no quantification of December comps, compared with the prior sales release stating that November comps had risen by 10.1%. There was also no mention of traffic or conversion in the most recent release. The prior update stated that the traffic and conversion was "exciting for everyone across our organization."
The analyst highlights that while both months' releases stated that the company was "pleased" with its performance, it is apparently no longer "excited" about traffic and conversion trends.
J. C. Penney also reaffirmed its fourth quarter outlook, which set expectations of "positive" comp store sales. The analyst notes that comps could be slightly negative for both December and January and the quarter could still be positive. The one positive takeaway is that the company still expects to end the quarter with $2.0 billion in liquidity, he said.
As a result of the presumed deceleration in comps, the firm is maintaining a 3.0% comp estimate for Q4. "Given the calendar in this year's Q4, we expected industry wide comps to be strongest in November," Snyder comments. "Thus, we are not surprised that December was presumed to be lower than the 10.1% November comp; we would just like to know by how much."
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 are down 7.8% to $7.54.
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