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 J.C. Penney Co Inc <JCP.N> shares slid 8 percent after the
department store chain said on Wednesday it was "pleased" with its
holiday sales performance, but skimped on specifics.
Other retail stocks were down slightly, but the lack of detail in
the Penney release fueled speculation that its turnaround is
stalling.
It was the second most actively traded New York Stock
Exchange-listed share.
The spare two-paragraph news release on Wednesday, which did not
include a figure for its comparable sales growth for December, stood
in stark contrast with earlier, detailed statements about its
performance in October and November, when sales ended a nearly
two-year streak of monthly declines.
In those, Penney gave specific figures and discussed its online
business, gross margin and shopper traffic trends. Those positive
results gave Penney shares a lift after they hit 32-year lows in
October.
"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."
A Penney spokeswoman declined to comment beyond the news release.
The retailer, which is expected to report fourth-quarter results in
February, is fighting to win back shoppers after a failed experiment
to go up-market in 2012 and early 2013.
Penney faced intense competition from rivals during the holiday
season. Many analysts said the season saw the most aggressive
discounts and sales since the recession.
Gimme Credit senior high yield analyst Evan Mann called the update
"skimpy" and asked "Where's the beef?" He said the paucity of
details was disappointing given how much concern there is about
Penney's financial situation.
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Penney reaffirmed its forecast for a rise in comparable-store sales
in the fourth quarter and expects to have total liquidity of more
than $2 billion at the end of the current fiscal year.
The company previously reported a 10.1 percent gain in November
comparable-store sales. But analysts said Penney could still log a
gain for the full quarter, even if sales fell in December.
If sales fell last month, UBS analyst Michael Binetti said "it would
be a major blow" to analysts' belief that Penney's business is
stabilizing.
Penney has been cutting prices aggressively to bring shoppers back,
and has been giving prominence to in-house brands such as St. John's
Bay. It has offered deep discounts on lines such as home goods by
Michael Graves that failed to catch on with shoppers in its 2012
attempt to offer trendier wares.
Penney shares were down 8.1 percent at $7.53 in afternoon trading.
The stock has slumped 67 percent since it hit a 52-week high of
$23.10 last February.
(Additional reporting by Sagarika
Jaisinghani in Bangalore; editing by Bernadette Baum and Andre Grenon)
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