Why J.C. Penney Inc. (JCP) Is Down Today

NEW YORK (TheStreet) -- J.C. Penney  (JCP) declined by 4.3% to $8.30 on Tuesday as a lawsuit with Macy's (M) regarding Martha Stewart Living Omnimedia (MSO) continues. 

Stewart's company and Macy's announced Thursday they had settled a lawsuit in which Macy's accused Martha Stewart Living of violating their exclusivity agreement by selling products at J.C. Penney. Neither Macy's nor Martha Stewart Living released the terms of the settlement, but Macy's said the settlement wouldn't affect its ongoing lawsuit against J.C. Penney.

The tangle began in 2011 when Stewart made a deal with J.C. Penney to sell her home goods in the store, and the retailer agreed to acquire close to 17% of Martha Stewart Living. Stewart's company had already been selling products in Macy's for years at that point, so Macy's responded swiftly by suing both Martha Stewart Living and J.C. Penney.

J.C. Penney said in October that it would reduce the amount of Stewart's products featured in its stores, including beds, bath products and cookware, and also said it would sell its stake in Martha Stewart Living. A judge in New York permitted J.C. Penney to continue to sell Stewart's products under its "Everyday" designation that doesn't contain Stewart's name.

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 its recommendation:

"We rate PENNEY (J C) CO (JCP) a SELL. This is driven by multiple 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."

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