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

With of these 3 turn-around retail stocks has the most potential?

Chris Lau, Kapitall: Are these turnaround retail stocks Cinderellas or ugly sisters?

Retailers have been poor performers recently, but when J. C. Penny (JCP) reported better than expected revenue, the stock rose 16 percent that day. Should investors be bullish on J. C. Penny again?

J. C. Penny reported a quarterly loss of $1.16 per share in Q1 on revenue of $2.8 billion. The battered retailer beat consensus estimates by $0.10 per share and $90 million, respectively. The stock’s change in price is flat for the month. Since shares are underperforming for the year, it potentially has more ground to regain.

The turnaround in J. C. Penny could mean the stock will reach and hold the double digits (it closed recently at just below $10). Costs are going down, while online sales are improving. Having reported weak results in the past, it will now be easier for the firm to report improving numbers. More importantly, comparable store sales growth is up for the second quarter in a row.

J. C. Penny reported higher sales, up 6.2% in the quarter, thanks to re-merchandising, a resonating marketing message, and key promotional events.

The successful turnaround in J. C. Penny is bad news for competitors. Macy’s ( M) and Sears Holdings (SHLD) stand to lose as J. C. Penny improves its operations.

Macy’s reported a comparable-store sales decline of 1.6 percent in Q1. Gross margin was mostly unchanged at 38.9%. The firm said it would repurchase up to $1.5 billion shares.

Sears Holdings is looking to close poorly performing stores, and it also wants to unload Sears Canada. Target (TGT) is reportedly looking to unload its Canadian division as well. Target lost billions when it opened stores in Canada.

Bottom Line

Retailers underperformed recently, but J.C. Penny looks like a true turnaround story. Conversely, Sears is under pressure to sell real estate and close stores.

1 of 2

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
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs