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Autohome Inc. Message Board

da_m62 7 posts  |  Last Activity: Jul 15, 2014 3:21 PM Member since: Jan 20, 2014
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  • Change in Consensus Earnings Estimate
    EPS estimate up $0.165 to $-0.939 for quarter ending 7/2014 JCP J C Penney Company Inc

  • da_m62 by da_m62 May 19, 2014 5:08 PM Flag


  • Fitch Affirms J.C. Penney's IDR at 'CCC'; Assigned Positive Outlook
    4:29p ET May 19, 2014 (Business Wire) Print

    Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. at 'CCC' and assigned a Positive Outlook. A full list of rating actions follows at the end of this press release.


    The ratings continue to reflect the material deterioration in J.C. Penney's business over the past two years with revenue down over 30% to $11.9 billion and operating EBITDA loss of $630 million versus a revenue base of $17.3 billion and positive EBITDA of $1.3 billion in 2011. While the business is beginning to show some positive traction, the road to recovery remains highly uncertain and it is too early to ascertain whether the company will see a sustainable improvement in its business over the next 24 months to 36 months to a level where it can internally fund its operations and debt maturities.

    The Positive Outlook reflects J.C. Penney's recently improved liquidity profile following a number of actions it has taken over the past few months. On May 15, 2014, J.C. Penney announced it is upsizing its credit facility from $1,850 million to $2,350 million during 2Q'14, providing another $0.5 billion liquidity cushion during peak seasonal needs.

    In addition, the company reduced SG&A expenses by almost $300 million in the fourth quarter of 2013 (4Q'13) versus Fitch's expectation that expenses would be flat. Overall expenses are expected to be flat in 2014 relative to the lower 2013 expense structure. Finally, capex is projected at $250 million in 2014. While the $250 million level is not sustainable over the long term, Fitch views the projected level of $250 million to $300 million level as adequate for the next two to three years given the uplift of the entire store base from the major remodels conducted in 2012/2013.

    First-quarter comps came in at +6.2%, providing early indications that J.C. Penney's business is beginning to turn the corner with the reintroduction of promotions, key private brands and other remerchandising initiatives such as beefing up the basics offering and revamping the home department. However, the recovery is expected to remain slow given the overall weak sales and pricing environment. Gross margin at 33.1% improved sequentially and was up over 220 basis points (bps) versus the year ago period but remains well below pre-2012 levels of 40%-41%.

    For 2014, Fitch expects mid-single digit comps and gross margin in the mid-30%. Given the lower expense structure, Fitch expects J.C. Penney to generate EBITDA in the $250 million to $300 million range. With EBITDA expected to be negative the first three quarters, the ability to generate projected EBITDA will be dependent on sustaining mid-single digit comps and 35% to 36% gross margin during the important holiday season in 4Q.

  • da_m62 by da_m62 May 16, 2014 12:41 PM Flag


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