Is a turnaround taking hold at J.C.Penny?

February 21st, 2016

It has been a tumultuous few years for J. C. Penny (JCP).  Ron Johnson made drastic changes to the company that saw dramatic drops in revenue and profitability.  Ron has been blamed for alienating loyal customers.  But, the changes to store layout that he pioneered, in my opinion, makes for a more engaging shopping experience.  It seems like the new CEO – Marvin Ellison – has kept the layout changes pioneered by Ron.

The fourth quarter of 2015 results to be announced on February 26th, 2016 will be a crucial one.  J. C. Penny has shown momentum in revenue growth in 2015 and if there is strong revenue growth in Q4, it may put the company on path to more market share gains and hopefully, profitability at some point in the near future.  In January of 2016, J. C. Penny reported a  3.9% increase in sales at existing stores during the holiday period.  So, this is a very encouraging sign, barring a recession, it seems like a turnaround is taking hold at J. C. Penny.

I have compared Macy’s to J. C. Penny in some of the charts below.  You can also find my report on Macy’s on my blog post here.

Here’s are some of the financial facts in charts:

Exhibit 1: J. C. Penny Revenue For Fiscal Years 2012-2014

Exhibit 2: J. C. Penny Quarterly Revenue for Fiscal Years 2012 to Q3 2015

Exhibit 3: J. C.  Penny Quarterly Year-over-Year Revenue Growth Percentage (Q1 2013 Compared to Q1 2012)

Exhibit 4: Macy’s Vs. J. C. Penny Quarterly Year-over-Year Revenue Growth (Percentage – Q1 2013 Compared to Q1 2012)

Exhibit 5: Macy’s Vs. J. C. Penny Quarterly Revenue (In Millions of USD)

Exhibit 6: J. C. Penny Earnings Per Share (USD Per Share)

J. C. Penny has declared a loss the last four years, but all that could change if a turnaround takes hold.

Exhibit 7: J. C. Penny Weighted Average Diluted Shares Outstanding (No. of Shares)

There’s been an increase of about 86 Million shares in the number of outstanding shares since Q3 of 2012.  If and when they return to profitability, the per share profit will be watered down because of this increase in number of outstanding shares.

Disclaimer:  I just love learning about companies.  I am not an investment advisor and this blog post should not be considered investment advice.