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Morningstar retail analyst Paul Swinand on how the retailer’s new sales strategy will impact its bottom line.
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Wealth from food retailers including retailers keep a close -- and shares of JC Penney -- up today ahead of earnings -- that a good sign but the real question here is.
How retailers -- strategy impact the bottom line because really up till now.
Hasn't been doing all that well the shares are down 39% year to date doing if -- EC -- screen possibly -- retail analyst at Morningstar called great CO.
Good afternoon and thanks for having me think JC penny stock as you know it's had a tough go of it lately but should more optimistic.
On the shares -- that you.
The first thing I'd like to start out with those listening in -- year to the program and you let off with the no sales strategy.
There's a tactical error here where the customer.
Wall Street and obviously the media doesn't understand that there is still a sales strategy it's just -- twelve sale -- year stress.
Isn't that so that'll probably had to -- and JC Penney is communicating their sales strategy absolutely nobody gets that across the board and -- got -- kind of with a little -- even -- absolutely we will -- squares what they called -- parents grandparents she -- -- and I don't think anybody still understands what that do you explain I didn't really don't understand that there's still our sales.
OK so there still aren't they are tightening go on year round so why -- people biting.
Well one the other for that so again I think that the tactical problem that they can't fix.
On the reason people -- the problems on.
On the sales line is actually traffic so they used to do mailers and coupons he would get the coupons come -- -- store.
They're not doing the coupons -- -- -- traffic is down.
But I think there's a new customer that's coming in the store and buying stuff that they see had either regular price or the month long sale price which is already happened in the first quarter.
And that's -- eventually lead to higher margins.
OK well that's that's optimistic that would be great for JC Penney you've got a 38 dollar fair value estimate the shares as you know -- up ahead of the earnings so you expecting.
Better than expected.
Report tomorrow morning.
Well -- you know.
Right now everybody thinks that this the second quarter is gonna be a disaster and to be honest I saw.
Stuff not moving -- -- quarter and then it moved to very low marked down her clearance level at the beginning of a third -- -- that usually spells bad news for the past quarter.
So that the question is here how much is in the -- already -- in my estimation that even that shatters -- JC -- are saying sales are awful so.
Maybe it started in the stop.
You know you sent us this clever note ahead of our interview asset myths about JC Penney analysts -- -- been going around.
And it's interesting the first one is the market share is going to -- to Macy's and Kohl's.
And you -- got real fired up about that saying it's not true.
Yeah I got fired up about that because I keep hearing and over and over and the -- that calls or negative three and and pieces of underperform plant so it -- it JC -- missing three billion of sales.
It's gonna continue to thin air or somewhere but not to -- -- -- so that that's kind of that's kind of met.
And circulating back to the new CEO he came in such pomp and circumstance from apple Ron -- strategy is blowing up and Ron Johnson space over at JC -- a lot of people are -- disagree that slap.
What yeah -- I'm actually at stunned at how quickly Johnson is moving and how well things are working there and you know I try to talk people in stores.
People are happy about the changes.
On the stores look mature -- but that they'd look absolutely different than they did last year they look like leader they have different colors.
Are -- -- any -- -- they're fairly yourself right now Paul.
I I am not wearing SEC penny -- -- -- that's come and anytime soon IRA I think there's the younger customer and it's in the store right now.
They're older customers the one that's disappointed.
I think you we think that's that you're saying that's key for them is the -- younger demographic Paulson and thanks so much appreciate it appreciate -- analysis.
Thank you -- a little rude to my friend Lori Rothman was realized he -- he and I did not like that I might be calling pilot in the pan out in great.
