J. C. Penney Company Inc. (JCP), one of the leading retailers, recently reported healthy sales results for the four-week period ended February 26, 2011. The company’s comparable-store sales for February 2011 jumped 6.4%. Total sales also inched up 2.7% during the month to $1,214.0 million.
Fresh spring collection, outstanding customer service, convincing Valentine’s Day gift assortments for all ages, lifestyles, and budgets facilitated the company in generating strong results.
Further, the company’s strategy to gain competitive advantage over the drug stores has significantly enhanced its cosmetics segments performance with the in-store Sephora departments continuing to outperform by drawing younger and more affluent customers.
The in-store Sephora concept instigates confidence and is expected to be a significant revenue driver. Hence, the company targets 76 Sephora shops in fiscal 2011.
The Plano, Texas-based J. C. Penney registered comparable-store sales growth across all merchandise divisions with jewelry, women’s attire and accompaniments, children’s clothing recording strong sales results. The company witnessed increased sales in every region with the southwest and northeast showing robust sales.
Prior to it, the company delivered better-than-expected fourth-quarter 2010 results on the heels of improved merchandise assortments and a redefined jcp.com platform. J.C. Penney expects comparable-store sales growth in the low-to mid-single digit range for fiscal 2011. For first-quarter 2011, the company forecasted comparable-store sales between 3.0% and 5.0%.
The company in order to improve its customer’s shopping experience has been focusing on remodeling, renovating and refurbishing of stores as well as refreshing its website functionality due to continued migration to online shopping.
J. C. Penney’s well diversified supplier base, compelling merchandise, marketing campaigns, technological initiatives as well as effective cost and inventory management are expected to drive sales and margin trends over the long term.
J. C. Penney currently operates 1,100 plus department stores in the United Statesand Puerto Rico and competes with retailers like Macy’s Inc. (M) and Kohl’s Corporation (KSS).
At present, we have a long-term ‘Neutral’ recommendation on the stock. Moreover, J. C. Penney holds a Zacks #1 Rank, which translates into a short-term ‘Strong Buy’ rating.
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