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NEW YORK (TheStreet) -- J.C. Penney Co. (JCP) - Get J. C. Penney Company, Inc. Report stock closed down 2.80% to $7.98 in afternoon trading on Monday as the retail sector closed in the red following soft sales over the Thanksgiving weekend.

Total in-store sales were down 1.5% to $12.1 billion on Thursday and Friday, compared with $12.29 billion for the same two days last year, according to preliminary data from ShopperTrak, Deutsche Bank said in an analysts note this morning.

Online sales increased 26% on Thanksgiving and 21.5% on Black Friday, data from IBM Watson Trend (IBM) showed, analyst added.

About 121 million shoppers plan to shop online for today's Cyber Monday deals, a decline from 126.9 million shoppers last year, according to the National Retail Federation survey.

J.C. Penney opened its doors at 3 p.m. on Thursday, giving the company a competitive edge as most retailers opened at 6 p.m.

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"J.C. Penney performed well and gained market share this year, in our opinion, driven by its earlier Thanksgiving opening time and robust soft home goods sales, and good traffic follow-through later in the weekend," analysts noted.

Separately, TheStreet Ratings team rates PENNEY (J C) CO as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate PENNEY (J C) CO (JCP) a SELL. This is driven by a number of negative factors, 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 generally high debt management risk and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is very high at 3.42 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 0.23, which clearly demonstrates the inability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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.
  • Net operating cash flow has increased to -$232.00 million or 27.50% when compared to the same quarter last year. Despite an increase in cash flow of 27.50%, PENNEY (J C) CO is still growing at a significantly lower rate than the industry average of 93.54%.
  • 37.35% is the gross profit margin for PENNEY (J C) CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.72% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • You can view the full analysis from the report here: JCP

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.