(Adds analyst note)
By Phil Wahba
Jan 8 Sometimes, no news is bad news.
J.C. Penney Co Inc 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
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
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.
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
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)