JCP Stock Gains as Turnaround Efforts Begin to Yield Results

JCP Stock

JCP stock has been on an upward trajectory in recent weeks as the turnaround efforts at struggling retailer JC Penney (NYSE:JCP) begin to bear fruit.

JCP Stock Recovers From Near Delisting

Much like most retail stocks, JC Penney had been suffering for quite some time to contend with the rise of e-commerce, and mounting debt had caused JCP shares to hover around the $1 mark. In September, the company was faced with delisting from the New York Stock Exchange for trading below $1 for 30 consecutive days. Disappointing quarterly results in August further accentuated these problems; however, its most recent earnings released last week have signaled optimism for investors, despite a few negatives still cropping up.

Q3 showed that there is definitely progress at JC Penney, but growth is still an issue. Comparable-store sales fell by 9.3% year-over-year, while adjusted comparable-store sales decreased by 6.6% in the quarter. Through the first nine months of the year, comp sales are down 8% compared to a 1.7% decline in 2018. JC Penney’s revamp of its stores by incorporating bars, cafes, and even fitness studios into locations is an innovative step forward; however, sales keep companies afloat, and it is definitely an issue to address. Nonetheless, JCP stock is up 35% in the last two months.

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Target an Inspiration

Perhaps management at JC Penney could look to larger rival Target (NYSE:TGT) as inspiration on how predominantly brick-and-mortar retailers can continue to compete in the age of e-commerce. TGT stock had been suffering from early 2017, and the company contended with largely the same issues JCP stock is faced with. However, TGT stock is now trading at its highest-ever valuation following the highly successful implementation of a turnaround strategy.

By creating a more enjoyable shopping experience through a massive store revamp, building out its online presence, and becoming more competitive price-wise, Target reported a 17% profit increase back in August, with online sales climbing 34%. TGT shares have rocketed to $126.49 in recent months, which is prime evidence that there is no reason JC Penney can’t replicate that success. JCP stock is currently trading for $1.10 in New York.

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