J.C. Penney (JCP) Stock Retreating Today as Black Friday Sales Decline

NEW YORK (TheStreet) -- Shares of J.C. Penney Co. Inc. (JCP) are down by 4.81% to $7.62 in late morning trading on Monday as retail stocks fall on disappointing Black Friday weekend shopping sales.

Retail spending over the Thanksgiving weekend dropped by 11%, the National Retail Federation says, as Black Friday seems to be losing its appeal with consumers, the Wall Street Journal reports.

For the Thursday through Sunday period total spending fell by 11% to $50.9 billion, when compared to the 2013 Black Friday shopping weekend.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Shoppers spent an average of $380.95 over the weekend, a 6.4% drop from last year, the Journal added.

One reason for the decline in sales over the weekend is that some retailers began offering Black Friday sales in the weeks ahead of Thanksgiving, allowing shoppers to get a jump on their gift-getting and avoid the massive crowds and lines typical on Black Friday, the Journal noted.

Consumers "don't feel like they have to get out that one day or miss spending the holidays with their families," the senior VP for Disney (DIS) Store North America told the Journal.

Other retailer stocks retreating today include Kohl's Corp. (KSS) , down by 3% to $57.83, Macy's Inc. (M) , lower by 1.97% to $63.63, and Dillard's Inc. (DDS) , down by 1.28% to $116.37.

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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 several 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 generally high debt management risk and generally disappointing historical performance in the stock itself."

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

  • The debt-to-equity ratio is very high at 2.23 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • JCP has underperformed the S&P 500 Index, declining 17.21% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.0%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • PENNEY (J C) CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PENNEY (J C) CO reported poor results of -$6.07 versus -$4.49 in the prior year. This year, the market expects an improvement in earnings (-$2.58 versus -$6.07).
  • You can view the full analysis from the report here: JCP Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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