Back to top

Image: Bigstock

Factors to Know Ahead of J. C. Penney's (JCP) Q1 Earnings

Read MoreHide Full Article

J. C. Penney Company, Inc. (JCP - Free Report) is slated to release first-quarter fiscal 2019 results on May 21, before the market opens. The Zacks Consensus Estimate for the quarter under review stands at a loss of 39 cents. A loss of 22 cents per share was recorded in the year-ago period. The Zacks Consensus Estimate for revenues is $2,521 million, indicating a decline of 5.6% from the year-ago quarter’s reported figure.

Let’s see how things are shaping up prior to this announcement.

J. C. Penney Company, Inc. Price and EPS Surprise


Factors Affecting the Stock

J. C. Penney has been in troubled waters for quite some time, losing customers to cheap sellers as it has failed to bring new fashion trends. Dwindling sales trend owing to declining store traffic has been negatively impacting the company’s performance and is one of the prime concerns. Although it has been making turnaround efforts such as brand makeover, enhancing omni-channel capabilities and entering partnerships, none seem to be working for the company.

The stock has been struggling with shrinking gross margin for the past few quarters and the trend is likely to continue in the to-be-reported quarter. Management revealed that, going forward, it will continue to reduce unproductive inventory and take preventive measures to stop the piling up of excess inventory. In this regard, the company has decided to eradicate noncore product categories such as major appliances and furniture.

What Does the Zacks Model Say?

Our proven model does not conclusively show that J. C. Penney is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

J. C. Penney has a Zacks Rank #5 (Strong Sell) and an ESP of 0.00%. We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks With Favorable Combination

Here are some better-ranked companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Boot Barn Holdings (BOOT - Free Report) has an Earnings ESP of +2.62% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deckers Outdoor Corporation (DECK - Free Report) has an Earnings ESP of +53.19% and a Zacks Rank #3.

Best Buy Co (BBY - Free Report) has an Earnings ESP of +0.31% and a Zacks Rank #3.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>