This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

J.C. Penney Gains, Zumiez Wanes: Retail Roundup (Update 1)

NEW YORK ( TheStreet) - Retail sector stocks were mixed on Tuesday, following slight market gains from positive global manufacturing reports as well as a collective sigh of relief following the postponement of an imminent strike on Syria.

The S&P Retail Select Industry Index closed at 4030.92, gaining 0.26% on the day/

J.C. Penney (JCP - Get Report) rose 1.9% to $12.72 after Kyle Bass of Hayman Capital Management revealed in a filing that the firm owns a 11.4 million, or a 5.2% passive stake in the troubled retailer.

The news was refreshing to investors following last month's Bill Ackman-JCP showdown, in which the hedge fund investor attempted to garner support to remove CEO Mike Ullman and Chairman Tom Engibous.

The public battle ended with Ackman resigning from J.C. Penney's board of directors and now in the process of selling his entire 18% stake.

As a result of the fight, J.C. Penney also implemented a so-called poison pill, making it very difficult for any future investors to own more than 10% of the company's common stock.

Separately, Glenview Capital Management said in a filing on Tuesday after the markets closed that it more than doubled its ownership of J.C. Penney shares. The hedge fund now owns 20.1 million shares, or a 9.1% stake, of J.C. Penney. According to its more recent 13F filing with the SEC, Glenview owned about 8.4 million shares.

Glenview is now the largest shareholder in J.C. Penney shares.

Also see: J.C. Penney Drops as Ackman Selling Stake

Also see: Williams-Sonoma Beats Earnings Estimates; Results Leaked

Also see: Williams-Sonoma's Next Big Thing Williams-Sonoma (WSM - Get Report) shares fell 0.8% to $55.94 following a downgrade on Tuesday by Canaccord Genuity analyst Laura Champine to "hold" from "buy."

Williams-Sonoma "faces notable gross margin headwinds in [the second half of the year] as we believe more aggressive promotions will continue to drive sales, particularly in the retail segment," the analyst wrote in a note. Champine estimates that the company's gross margin will decline 53 basis points in the second half compared to last year, "the company's weakest margin" since 2009.

"WSM is also contending with investments above its initial expectation as its ramps up its global infrastructure to support new company-operated stores and e-commerce sites in Australia and the U.K.," the note says.

Champine believes that the near-term pressure is fairly reflected in the stock's forward earnings multiples.

Shares of Zumiez (ZUMZ - Get Report) closed down 1.5% to $26.30.

The teen retailer reports earnings after the markets close on Thursday. Analysts' expect Zumiez to report earnings growth of just 2% over last year to 17 cents a share. Revenue is expected to rise 17% to $158 million, according to Thomson Reuters.

RW Baird analysts expect the teen retailer to report similar sales trends as other retailers in the quarter and for the company to provide cautious third-quarter guidance.

Retailers that cater to the teen sector saw overall disappointing numbers for the second quarter as mall traffic was light and an overly competitive environment reflected in large promotions hindered any of the stores from getting much traction in the quarter.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to:

>To submit a news tip, email:

Follow TheStreet on Twitter and become a fan on Facebook.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ZUMZ $16.60 0.00%
JCP $8.21 0.00%
WSM $64.90 0.00%
AAPL $117.81 0.00%
FB $105.45 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs