J C Penney Company Inc (NYSE: JCP) announces investments in new and existing homes reach record levels, JCPenney is powering up its Home business by incorporating an appliance showroom to nearly 500 stores and online at jcp.com. This strategic decision is driven by a successful three-market pilot that validated the Company’s return to the appliance industry. JCPenney will also be pursuing its former leadership position in window coverings by allocating another 25 percent of floor space to an enhanced presentation of ready-made curtains, blinds, shades and decorative hardware in inspiring, open-sell displays that deliver a superior shopping experience.
The Company also said that it exceeded its EBITDA expectations for the first quarter of fiscal 2016 and that it continues to expect to achieve full year EBITDA guidance of $1 billion. JCPenney will report its results for the first quarter this Friday, May 13.
“We are taking steps to grow our business by introducing new brands, products and categories where our customers have shown us that there is a clear demand. Since launching major appliances in 22 stores last February, the response has been outstanding. The pilot confirmed that we should not limit our business to apparel and soft home in order to achieve significant revenue growth,” said Marvin R. Ellison, chief executive officer for JCPenney. “Additionally, we are pleased with our EBITDA performance in the first quarter, and remain on track in reaching our 2016 EBITDA objectives.”
Starting in early July through the fall, JCPenney will introduce major appliances to new stores every week until nearly half of its locations offer a leading selection of kitchen and laundry appliances from Samsung, LG, GE Appliances and Hotpoint. Additionally, customers nationwide will have the ability to shop and buy major appliances on jcp.com later this summer.
The availability of appliances in stores will correspond with those locations offering expanded window displays, enabling customers to shop a broad array of stylish window treatments from trusted private brands such as JCPenney Home(TM), Royal Velvet®, Liz Claiborne® and Studio(TM), along with leading national brands, including Bali®, Levolor® and Umbra®. JCPenney was once credited with covering one-third of the windows in America and regaining its dominance in this category presents greater occasions for increasing revenue and attracting new customers to stores.
Exploring Growth Opportunities in Home
As part of a comprehensive effort to improve the sales productivity of its Home department and increase revenue per customer, JCPenney will also test new initiatives with Ashley Furniture and Empire Today, a national leader in the installed carpet and flooring industry.
The Company has elected to add Signature Design by Ashley® to its furniture assortment in select stores and jcp.com by Memorial Day weekend, giving JCPenney customers the ability to shop living, dining and bedroom collections from the most recognized furniture brand in the country.
Through a unique venture with Empire Today, JCPenney will test the availability of flooring solutions in the Tampa, Fla., and Washington, D.C., markets beginning this summer. Each location will showcase a large selection of quality carpet, hardwood, laminate, vinyl and tile samples in a store-within-a-store concept staffed by Empire Today trained floor specialists. As an independent operator, Empire Today will occupy between 750 and 1,000 square feet inside the JCPenney Home department, overseeing responsibility for marketing, customer service and environment. Depending on the results of these tests, JCPenney will determine whether to expand these concepts to additional stores and markets.
Ellison added, “The current housing market presents a lucrative opportunity to diversify our Home assortment and strategically align with consumer spending patterns. By combining our soft home and window coverings merchandise with the industry’s leading brands for appliances, furniture and flooring, JCPenney will become a destination for home design and redecorating, allowing us to weather-proof our business during seasonal periods of the year.”
As JCPenney continues to advance its strategic priority to increase revenue per customer, the home department will remain a key area of importance as the Company explores partnerships and categories that present meaningful growth potential. By expanding appliances and the window presentation in approximately 500 stores, along with testing new partnerships, JCPenney will connect with more families, drive increased sales and make progress towards the Company’s goal of achieving $1.2 billion in EBITDA by the end of 2017. (Original Source)
Shares of J.C Penney Company closed last Friday at $8.26, down $0.67 or -7.50%. JCP has a 1-year high of $11.99 and a 1-year low of $6. The stock’s 50-day moving average is $10.07 and its 200-day moving average is $8.65.
On the ratings front, J.C Penney Company has been the subject of a number of recent research reports. In a report issued on May 6, J.P. Morgan analyst Matthew Boss reiterated a Hold rating on JCP, with a price target of $7, which reflects a potential downside of -15.3% from last closing price. Separately, on April 14, Argus’ Chris Graja reiterated a Hold rating on the stock.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Matthew Boss and Chris Graja have a total average return of 10.4% and 10.1% respectively. Boss has a success rate of 75.0% and is ranked #430 out of 3828 analysts, while Graja has a success rate of 69.0% and is ranked #459.
The street is mostly Neutral on JCP stock. Out of 17 analysts who cover the stock, 8 suggest a Hold rating , 6 suggest a Buy and 3 recommend to Sell the stock. The 12-month average price target assigned to the stock is $9.80, which implies an upside of 18.6% from current levels.