J. C. Penney Company Inc. has taken up several strategic initiatives to drive traffic. The company, in order to improve customer shopping experience, has been focusing on remodeling, renovating and refurbishing its stores, with special focus on enhancing the high-margin center core department that houses handbags, fashion accessories, sunglasses and fashion jewelry.
Moreover, we believe J. C. Penney’s efforts to further the reach of national and especially private-label brands through effective marketing campaigns and point-of-sale technology initiatives, should help improve gross margins. The company is also expanding its Home business by integrating an appliance showroom with approximately 500 outlets and online, at jcp.com. Further, the in-store Sephora departments continue to outperform by drawing more customers.
J. C. Penney’s strategic efforts enabled it to post a narrower-than-expected loss in the first quarter of fiscal 2016. The company reported adjusted loss per share of 32 cents in the first quarter, narrower than the Zacks Consensus Estimate of a loss of 40 cents. In the year-ago quarter, it had incurred an adjusted loss of 57 cents per share. Notably, this was the fifth straight quarter in which the company’s bottom line outperformed the Zacks Consensus Estimate.
Despite these positives, the company’s debt level raises concerns. Although J. C. Penney lowered its debt significantly during first-quarter fiscal 2016, the level still remains high. At the end of the reported quarter, total long-term debt was $4,388 million, reflecting debt-to-capitalization ratio of 77.8%. The company plans to lower its debt load in fiscal 2016 by $400–$500 million, and intends to reduce its net debt to EBITDA ratio from 5.4 times to less than 3 times by fiscal 2017.
Given the pros and cons embedded, the stock currently carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Investors interested in the retail space may consider some better-ranked stocks such as Delta Apparel Inc. (DLA - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and The Children's Place, Inc. (PLCE - Free Report) and Carter's, Inc. (CRI - Free Report) , both holding a Zacks Rank #2 (Buy).
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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J. C. Penney Company Inc. has taken up several strategic initiatives to drive traffic. The company, in order to improve customer shopping experience, has been focusing on remodeling, renovating and refurbishing its stores, with special focus on enhancing the high-margin center core department that houses handbags, fashion accessories, sunglasses and fashion jewelry.
Moreover, we believe J. C. Penney’s efforts to further the reach of national and especially private-label brands through effective marketing campaigns and point-of-sale technology initiatives, should help improve gross margins. The company is also expanding its Home business by integrating an appliance showroom with approximately 500 outlets and online, at jcp.com. Further, the in-store Sephora departments continue to outperform by drawing more customers.
J. C. Penney’s strategic efforts enabled it to post a narrower-than-expected loss in the first quarter of fiscal 2016. The company reported adjusted loss per share of 32 cents in the first quarter, narrower than the Zacks Consensus Estimate of a loss of 40 cents. In the year-ago quarter, it had incurred an adjusted loss of 57 cents per share. Notably, this was the fifth straight quarter in which the company’s bottom line outperformed the Zacks Consensus Estimate.
Despite these positives, the company’s debt level raises concerns. Although J. C. Penney lowered its debt significantly during first-quarter fiscal 2016, the level still remains high. At the end of the reported quarter, total long-term debt was $4,388 million, reflecting debt-to-capitalization ratio of 77.8%. The company plans to lower its debt load in fiscal 2016 by $400–$500 million, and intends to reduce its net debt to EBITDA ratio from 5.4 times to less than 3 times by fiscal 2017.
Given the pros and cons embedded, the stock currently carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Investors interested in the retail space may consider some better-ranked stocks such as Delta Apparel Inc. (DLA - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and The Children's Place, Inc. (PLCE - Free Report) and Carter's, Inc. (CRI - Free Report) , both holding a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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