| Earnings report was viewed as dismal. While there was an upside surprise, it was due to sale of property which happened to be an asset on the operational side of the books. This was clearly explained, but some analysts took this as an attempt to "hide" the loss. Loss was worse than expecting, after subtracting for the asset sale, due to poor SS comps, although almost all of the negatives occurred in February, with recovery of sales in March and April. Nevertheless, this was taken as a confirmation of the failure of the turn around taking hold, especially in the wake of poor sales reported at both Macy's and Nordstrom's just previously. Stock dropped precipitously. On the other hand, nothing suggested that the plan already put in place was not on track, and management maintained their prediction of profit for the full year. Moreover, the SSS challenge with poor February matched what was reported by other department and apparel stores before and now after. Today, TJ Maxx reported poor results too, with the same bad February followed by March and April recover. I believe that is why JCP stock had a major uptick today, since it suggests the story is industry wide and even the best performers where affected in the same way, and thus JCP may have been seen as oversold. Will this just be a post dump bounce, or part of a longer slow recovery? I still think the latter, or at this cheap price, that an acquisition seems even more likely, perhaps by a private fund. |
