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J.C. Penny Is Still Holding Up the Head Straight

Shares of J.C. Penney have been shifting greater right this moment after the corporate reported holiday sales last night and gave a replace on its present place. Regardless of weak outcomes over the holiday season, which included a comparable-gross sales drop of three.5% on a calendar-shifted foundation, traders nonetheless discovered one thing to love; they dispatched the overwhelmed-down replenish 11.2% as of 3:28 p.m. EST.

There isn’t any query that J.C. Penney’s comparable sales over the holiday season, the busiest time of year for retailers, have been disappointing, particularly contemplating the general sturdy shopper atmosphere and different experiences that retail sales surged throughout the reward-giving season. On an unshifted foundation, comps sank 5.4%, following an equivalent slide within the third quarter. In the meantime, Penney’s friends like Macy’s and Kohl’s have been posting comparable-sales gains.

Regardless of the weak numbers, the retailer stated it was nonetheless on observe for optimistic free money flow for the year, and would scale back stock by $225 million from a year in the past, or 8%, a positive signal for high profitability. It additionally mentioned it might finish the year with greater than $2 billion in liquidity, giving it some room for changes and investments underneath new CEO Jill Soltau.

Individually, the corporate mentioned it could start three preliminary retailer closings and consider its retailer portfolio for further potential ends. It should replace these throughout its fourth-quarter earnings report, set for Feb. 28.

Closing other shops look as if the fitting transfer, contemplating the retailer’s ongoing struggles to generate revenue and the broader shift within the trade towards e-commerce. J.C. Penney has one of many lowest gross sales per sq. Foot in retail, at $131. And the corporate is probably going overstored, with round 872 areas, even after closing 141 in 2017.

It is laborious to contemplate the gross holiday sales replace excellent news in any means. However, considering how far the inventory has fallen and the way low cost its buyers, appear to see an upside within the retailer-closing plan, and affirmation that J.C. Penney will nonetheless ship optimistic free money circulation for the year.

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