JCP - Embedded Expectations Analysis - 2018 10 26
J.C. Penney Corporation (JCP:USA) currently trades at historical lows relative to UAFRS-based (Uniform) Assets, with a 0.8x Uniform P/B. At these levels, the market has fairly muted expectations for the firm, while management has concerns about their inventory management, ability to increase margins, and to adapt to changing consumer trendsSpecifically, management may lack confidence in their ability to enhance their Women's Apparel assortment, and may lack confidence in their ability to reduce their excess inventory throughout H2 2018. Additionally, they may have concerns about the decline of overall store traffic across the industry in June, and may lack confidence in their ability to leverage their investments in customer insights to become more responsive to trends. Furthermore, they may have concerns about their slow-moving goods and excess inventory, and about their ability to increase margins. Finally, they may lack confidence in their ability to sustain strong performance in their Home Office Land Joint Venture, and may be exaggerating the improvements they are seeing in their home and legacy businesses
J. C. Penney Company is a holding company whose principal operating subsidiary is J. C. Penney Corporation, Inc. The company's business consists of selling merchandise and services to consumers through its department stores and its website at jcpenney.com. The company's department stores and website serve the same type of customers, its website provides the same mix of merchandise as its store assortment along with other extended categories that are not provided in store, and its department stores accept returns from sales made in stores and via its website. The company sells family apparel and footwear, accessories, jewelry, beauty products through Sephora inside JCPenney, and home furnishings.
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