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Factors Likely to Influence J. C. Penney (JCP) in Q3 Earnings

Zacks Equity Research

J. C. Penney Company, Inc. JCP is slated to release third-quarter fiscal 2019 results on Nov 15, before the market opens. The Zacks Consensus Estimate for the quarter under review is pegged at a loss of 55 cents. The company recorded a loss of 52 cents per share in the year-ago period. The Zacks Consensus Estimate for revenues is pegged at $2,522 million, indicating a 7.7% decline from the year-ago quarter’s reported figure.

J. C. Penney Company, Inc. Price and EPS Surprise

 

J. C. Penney Company, Inc. Price and EPS Surprise

J. C. Penney Company, Inc. price-eps-surprise | J. C. Penney Company, Inc. Quote

Key Factors to Note

Dismal comparable sales (comps) and weakness in certain business categories have been hurting the company’s top line. The company’s exit from the major appliance and in-store furniture categories have been negatively impacting comps for a while now. Moreover, J. C. Penney has repeatedly failed to bring fashionable and trendy apparel, thereby losing customers.

Nonetheless, the company’s turnaround efforts such as merchandising initiatives, store-rationalization and omni-channel endeavors are commendable. It has also been making efforts to drive traffic. It had teamed up with thredUP to cash in on the growing demand for high-quality, second-hand products provided at lower prices. The new in-store experience is likely to cater to consumers that look for sustainable apparel options. Gains from this initiative are expected to get reflected in the to-be-reported quarter’s results.

What Does the Zacks Model Say?

Our proven model doesn’t conclusively predict an earnings beat for J. C. Penney this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although the company carries a Zacks Rank #3 (Hold), its Earnings ESP of -2.89% makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General DG has an Earnings ESP of +2.34% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lowe’s Companies LOW currently has an Earnings ESP of +1.62% and a Zacks Rank #2. 

Children's Place PLCE currently has an Earnings ESP of +17.24% and a Zacks Rank #3.

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