JCPenney “Pleased” with December Sales, Wall Street? Not So Much

jcpenneyxmasPlano, TX—JCPenney reported today that it was “pleased” with its holiday sales performance. However, Wall Street responded to the scant report with a drop in the beleaguered department store’s shares.

Following its recent trend toward revealing monthly comparable store sales, JCPenney only released a two-paragraph statement sans figures for its December comp sales growth—a turnaround from its more detailed statements released for October and November performances. In those previous reports, JCPenney posted comp store gains ending nearly two years of monthly declines, commented on online sales, gross margin and shopper traffic.

The fact that JCPenney offered less information lead many on Wall Street and retail analysts to assume the store posted a decline in its December sales. Shares were down more than 9% in early trading today after the report was released.

But Reiterates Q4 Forecast

A JCPenney spokesperson declined to comment beyond the news release.

Even if JCPenney had a sales decline in December, the retailer could still post a full fourth quarter gain. In fact, JCPenney also reaffirmed its forecast for a rise in comp store sales in the fourth quarter and expects to have total liquidity of more than $2 billion at the end of its fiscal year in February.

Still, retail analysts took the taciturn report as a sign JCPenney may have suffered from the intense competition during the highly promotional holiday season.

“If JCP had good things to say about business trends, the company would have shared more,” Sterne Agee analyst Charles Grom wrote in a note. “The slope of the improvement at JCPenney needs to be much greater than it is currently tracking.”

Evan Mann, Gimme Credit senior high yield analyst, called the update “skimpy” and asked “Where’s the beef?” noting that the lack of details was disappointing considering JCPenney’s dire financial situation.

UBS analyst Michael Binetti said that if sales really did fall in December, “it would be a major blow” to analysts who felt that JCPenney’s business is stabilizing.

“What companies don’t say can be far more important than what they do say,” Rick Snyder, an analyst for Maxim Group LLC, told Bloomberg News. “This press release is remarkable for being unremarkable.”

 

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com