Update (4:12 p.m. EST): Updated with closing price, day high and low prices, price change and volume information.
NEW YORK (TheStreet) -- J.C. Penney (JCP) fell 1.57% to $6.90, down 11 cents from its previous close of $7.01, at the close of the trading day on Thursday after the company announced that it plans to close 33 stores and eliminate 2,000 jobs by May.
The stock had a volume of 42,255,543, an increase from its average of 34,732,700. It hit a high of $6.94 and a low of $6.40 for the day.
The company made the announcement Wednesday in an effort to spark a turnaround after sales have continued to plummet. According to Bloomberg, J.C. Penney has gone nine straight quarters without a profit and could post a $207 million loss for the current quarter.
J.C. Penney's latest move could save $65 million a year. According to a company statement, the store closings and job eliminations will lead to pretax charges of $26 million in the fourth quarter and $17 million in the future. The closings account for 3% of the Plano, Texas-based company's stores, and the job cuts account for 2% of its workforce.
The Huffington Post published a list of the 33 stores that the company plans to close.
TheStreet Ratings Team said, "We rate PENNEY (J C) CO (JCP) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins."
- The debt-to-equity ratio is very high at 2.12 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.36, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Multiline Retail industry and the overall market, PENNEY (J C) CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for PENNEY (J C) CO is currently lower than what is desirable, coming in at 29.47%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -17.59% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$737.00 million or 1502.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- PENNEY (J C) CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PENNEY (J C) CO reported poor results of -$4.49 versus -$0.73 in the prior year. For the next year, the market is expecting a contraction of 34.5% in earnings (-$6.04 versus -$4.49).
- You can view the full analysis from the report here: JCP Ratings Report
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