Lejuez calls to mind the expression: Often wrong but never uncertain.
GPS total sales were up 7.2%, not 8%, for the same reporting period that JCP used. It's unknown whether GPS added stores during the past year. If GPS compares 2013 sales for 4 weeks ending 12/1, with 2012 sales for 4 weeks ending 12/1, sales growth was only 2%. The difference is that 2012 sales, if taken to the end of November, include one whole week of holiday shopping, not just two days as for 2013.
In the GPS press release, they expect that December 2013 sales will increase by an amount closer to the 7.2% level than the 2% level, so JCP should also be able to sustain a 10% increase. I think that Lejuez is guessing when he says JCP Nov 2012 sales were down about 34% to 37%, and Dec 2012 sales were down about 30%, making a tougher comparison against 2013 for December as compared with November. I don't think JCP reported monthly sales last year. The situation could actually be the reverse of what he's saying, for an easier comp in Dec for JCP.
There are some unbelievably large open interests in calls for distant months. Are people selling common for the tax loss, and buying calls? Such would depress the current stock price, and put upward pressure on the stock when the calls expire.
Retay, I see your point and respect your opinion.
There's much going on at JCP that is never publicized. For instance, I believe RJ may have been forced to make various purchase commitments for the junk he was trying to push, so getting rid of RJ merchandise is not simply selling inventory on hand.
Whether a store is busy is not a sufficiently accurate measure of volume. The difference between a poor holiday and a fabulous one is about 10% in sales. I defy anyone to forecast sales with sufficient accuracy by judging whether a store is busy. On the other had, an empty store would be a very bad sign. But that's not what people are seeing.
Depending on how the holiday season works out, JCP may have to take additional steps to right itself. We shouldn't consider Q4 to be a make or break for JCP.
If Sears fell off the map, JCP would be one of the beneficiaries. Perhaps surprisingly, if Lampert bought JCP, he could close one store where two compete, maintain both chains, and reduce his losses as compared with what will be necessary with only Kmart and Sears under his control.
By whatever means, both JCP and Sears will have to close some stores.
It's interesting that the shorts on this board keep coming back to the notion that JCP is selling merchandise at drastically discounted prices. That suggests that JCP advertising has been successful in convincing consumers that it has the best prices. So the argument that some are using to say that JCP is doing poorly actually indicates that JCP is doing well.
Retay, do you believe that JCP is arranging its own demise by selling merchandise at an unnecessarily low price? Do you believe that discounting the price of unwanted inventory during the holiday is a bad idea? Can you provide a cogent reason why you believe JCP is falling behind what would be a reasonable rate of recovery of sales volume and gross margin?
Eric, I have no regard for the Fed either. There are many, much better economists around with a better understanding of the markets. I have no favorable expectations for Yellen either. History will be the judge.
With respect to today's decision, I have no idea what to expect. The Fed has behaved illogically with respect to several matters, so their actions are not predictable. Forward guidance is BS because the Fed has been unable to make any worthwhile predictions of economic activity for several years. They are paying too high an interest rate on excess reserves. And QE is a placebo; the recovery we're now experiencing would have occurred without QE.
I suspect a major component of recent price action is selling to offset gains in other stocks before the end of the year. Unfortunately, they will not be able to get back in at anywhere near these prices after December sales are released.
All the department stores have teams whose sole purpose is to gather price info from the competitors. None of them is going to sell merchandise below the prevailing prices for the area. The notion that JCP is cutting its own throat by selling at too low a price is hogwash.
I just read the WSJ article on easy money for the retailers. Some store closures are in order, and if done in an orderly fashion, all could remain in business. Although I can't stand Sears, a combination of JCP and Sears would enable a large number of closures at locations where they've been splitting the same market.
According to info on the net, Kohl's sports a sales per square foot of $191, and Sears comes in at $197. As of Feb 2013, JCP had 111 million square feet of store space. The current consensus estimate for JCP sales for the year ending Jan 2014 is $12 Billion, or $108 per square foot. Since it appears that JCP is attracting more customers than either Kohl's or Sears, it could quickly rebound to an annual rate of $150 per square foot, for total annual sales of $16.6 Billion. In fact, it's not a stretch to think that December sales will be up 20% YOY. If that happens, the shorts will be in a really bad situation.
At 11:40AM, I stopped at a location in Las Vegas that has a Kohl's, Sears, and JCP; all stand alone. Based on Google Maps scaling, the Kohl's is 75,000 sq, ft., the Sears is 120,000 sq. ft., and JCP is 90,000 sq. ft.. The car count at each was 83 at Kohl's, 86 at Sears, and 106 at JCP. Based on this objective count, JCP had the most shoppers and most shoppers per square foot of the three.
Interesting video. Sydney Finkelstein actually suggested that RJ may have been the worse CEO of the decade.
I doubt RJ actually made any decisions at Apple, or should claim any credit for the Apple store. Jobs called all the shots.
Alloro, JCP is a chance I'm willing to take.
Ackman, who bought JCP when it was high and sold near the low, was made to look the fool on Herbalife again today. So if you think that JCP is a good short because Ackman got out, I would reexamine your position.