J. C. Penney Sales Rise - Analyst Blog

J. C. Penney Company Inc. (JCP), a leading retailer of apparel, footwear, accessories, fashion jewelry, beauty products and home furnishings, recently reported its sales results for the four-week period ended November 27, 2010.

The company's comparable-store sales for November 2010 climbed 9.2%, reflecting a sharp improvement from a decline of 1.9% and a fall of 5.9%, witnessed in October 2010 and November 2009, respectively. For the 9-month period, comparable-store sales rose 2.5% compared with a decline of 7% in the same period last year.

Total sales also portrayed an improvement. After experiencing a drop of 3.3% in October 2010, total sales for November grew 7.2% to $1,845 million from $1,721 million in the same month last year. For the forty-three week (9-month) period ended, total sales edged up 1.3% to $13,900 million from $13,727 million in the same period last year.

The Plano, Texas-based J. C. Penney notified that all divisions registered comparable-store sales growth with shoes and men's apparel being the best categories. Geographically, the southwest and central regions were the top performing regions.

J. C. Penney witnessed record Black Friday sales, driven by fashion boots, the St. John's Bay cashmere-blend pea coat and polos, and Liz Claiborne athletic wear for women and Stafford flannel sleep pants for men.

Internet sales via JCP.com rose 12% for the month under review driven by men's and children's apparel, and shoes. J. C. Penney witnessed a surge in traffic counts during the month under review, with off-mall stores registering stronger traffic compared to mall-based stores.

J. C. Penney, which competes with Macy's Inc. (M) and Kohl's Corporation (KSS), currently operates more than 1,100 department stores in the United States and Puerto Rico.

J. C. Penney's well diversified supplier base, compelling merchandise, marketing campaigns, technological initiatives as well as effective cost and inventory management should drive sales and margin trends over the long term. The company remains on track to deliver comparable-store sales growth and boost market share.

Management guided comparable-store sales growth of 3% to 4% for fourth-quarter 2010. The in-store Sephora concept inspires confidence and is expected to be a significant revenue driver.

Currently, we have a Neutral rating on the stock. Moreover, J. C. Penney holds a Zacks #3 Rank, which translates into a short-term Hold rating, and correlates with our long-term recommendation.

 
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