JCP - 1 Key Sign That a J.C. Penney Comeback Is Still Possible
Shares of J.C. Penney (NYSE: JCP) plunged below the $1 mark in the second half of July, after the struggling retailer confirmed that it was investigating options for restructuring its debt. This development caused many investors to fear that bankruptcy was inevitable (if not imminent).
It substantially reduced its losses in the second quarter, though, despite another steep drop in sales. The company's margin expansion last quarter makes its problems seem far less dire. Moreover, several high-ranking executives and board members have bought substantial quantities of the stock with their own money in the weeks since the Q2 earnings report came out. This is a promising sign that J.C. Penney still has a reasonable chance of returning to profitability.
Comparable-store sales fell 9% last quarter. Excluding the impact of the company's moves to exit the appliance business and stop selling furniture in stores, comps fell 6%.