Context: $JCP Q4 sales last year dropped by 28.4% from $5.43 billion to $3.88 billion, and comps were down 31.7%. November comps up 10.1%.Richard Collings (@RichCollings) December 3, 2013
For JCP management to put out an announcement that basically says We don't suck quite as bad as we did when we hit rock bottom was, in and of itself, absurd. But the way the company colored its press release further illustrates why long-term investors should read nothing into this so-called news:
We are pleased with our performance over the Thanksgiving holiday weekend, particularly in light of the continued spending pressures on consumers.
Typical ... continued spending pressures on consumers. The classic fallback on external forces that are, of course, beyond the actor's control. Add tough economic times to the list of scapegoats employed by JCP's current regime.
But, putting the company's lame organizational culture and public face aside, be aware of what's going on here before you purchase JCP shares.
Management at the company looks good if the stock goes up.
Investors love beaten down stocks because they a) see nothing but upside and b) don't think the price can get much lower. On even the slightest good news, they see a name like JCP taking off, as evidenced by Tuesday's after-hours move.
If they're lucky -- both management and these speculative investors -- JCP will magically morph into another Best Buy (BBY), a company up 256% year-to-date on nothing but momentum-injected air and anything but a meaningful, long-term and sustainable turnaround plan.