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The coronavirus spread is growing enormously, leading to greater impacts every day. The pandemic has infected more than 750,000 people worldwide and the death toll has crossed 35,000. The retail sector is under major pressure, with companies shutting stores, limiting store hours and withdrawing their guidance. In fact, with the situation worsening, companies are left with no choice but to keep stores shut for extended durations as the situation is worsening. Nonetheless, retailers are also adopting several measures to reduce the adverse impact on their financial performances.
One of the latest retailers joining the slew of prolonged closures is J. C. Penney Company, Inc. . The company said that it will prolong its temporary store closure plan and expects to gradually reopen them when it is safe. Due to the store closures, the company also decided to temporarily furlough most of its store hourly associates from Apr 2. In fact, management stated that many of its supply chain and logistic center associates were already furloughed on Mar 20.
Notably, all furloughed workers (enrolled with the company’s benefits program) will keep getting full health benefits. Moreover, the company intends to sponsor all employee-paid premiums during the period. Apart from this, J.C. Penney has taken various moves to enhance its financial flexibility. These include curtailing expenditure, keeping recruitment on hold, delaying capital expenditure and utilizing funds under the revolving credit facility, to name a few.
Well, extended store closures and ways to enhance financial flexibility have been undertaken by several other retailers amid the growing coronavirus scare. Nordstrom (JWN - Free Report) , Guess? and Kohl’s (KSS - Free Report) are a few retailers who have extended store closures to contain the spread. Also, these companies are making efforts to improve their financial positions. In fact, Guess? is also furloughing all its U.S. and Canada store associates from Apr 2. Some other companies furloughing employees include Five Below and Gap (GPS - Free Report) .
J. C. Penney had originally announced store closures from Mar 18 to Apr 1. Though the company has extended the shutdown period, customers can continue shopping online, as J.C. Penney’s e-commerce distribution centers will remain operational. However, the impact of such prolonged closures is likely to be felt on the company’s top line in the first quarter of fiscal 2020. In fact, J. C. Penney has long been grappling with dwindling sales, which could be partly attributable to the company’s failure to bring in fashionable and trendy brands.
Shares of this Zacks Rank #3 (Hold) company have collapsed 67.8% so far this year compared with the industry’s decline of 65.6%.
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J.C. Penney Extends Closures, Furloughs Workers Amid Coronavirus
The coronavirus spread is growing enormously, leading to greater impacts every day. The pandemic has infected more than 750,000 people worldwide and the death toll has crossed 35,000. The retail sector is under major pressure, with companies shutting stores, limiting store hours and withdrawing their guidance. In fact, with the situation worsening, companies are left with no choice but to keep stores shut for extended durations as the situation is worsening. Nonetheless, retailers are also adopting several measures to reduce the adverse impact on their financial performances.
One of the latest retailers joining the slew of prolonged closures is J. C. Penney Company, Inc. . The company said that it will prolong its temporary store closure plan and expects to gradually reopen them when it is safe. Due to the store closures, the company also decided to temporarily furlough most of its store hourly associates from Apr 2. In fact, management stated that many of its supply chain and logistic center associates were already furloughed on Mar 20.
Notably, all furloughed workers (enrolled with the company’s benefits program) will keep getting full health benefits. Moreover, the company intends to sponsor all employee-paid premiums during the period. Apart from this, J.C. Penney has taken various moves to enhance its financial flexibility. These include curtailing expenditure, keeping recruitment on hold, delaying capital expenditure and utilizing funds under the revolving credit facility, to name a few.
Well, extended store closures and ways to enhance financial flexibility have been undertaken by several other retailers amid the growing coronavirus scare. Nordstrom (JWN - Free Report) , Guess? and Kohl’s (KSS - Free Report) are a few retailers who have extended store closures to contain the spread. Also, these companies are making efforts to improve their financial positions. In fact, Guess? is also furloughing all its U.S. and Canada store associates from Apr 2. Some other companies furloughing employees include Five Below and Gap (GPS - Free Report) .
J. C. Penney had originally announced store closures from Mar 18 to Apr 1. Though the company has extended the shutdown period, customers can continue shopping online, as J.C. Penney’s e-commerce distribution centers will remain operational. However, the impact of such prolonged closures is likely to be felt on the company’s top line in the first quarter of fiscal 2020. In fact, J. C. Penney has long been grappling with dwindling sales, which could be partly attributable to the company’s failure to bring in fashionable and trendy brands.
Shares of this Zacks Rank #3 (Hold) company have collapsed 67.8% so far this year compared with the industry’s decline of 65.6%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>