Yippee!!! JC Penney ONLY lost $167 million in the first quarter. The Wall Street shysters are ecstatic because they BEAT expectations. Buy Buy Buy.

This loss now brings JC Penney’s cumulative loss since 2011 to, drum roll please, $3.5 BILLION. They haven’t had a profitable quarter in over four years. But, they are always on the verge of that turnaround just over the horizon.

Wall Street has told you to buy this stock from $42 in 2012 to it’s current pitiful level of $9. They tout the wonderful 3.4% increase in comparable sales. They fail to mention that first quarter 2016 sales are only 30% below first quarter sales in 2011.

They fail to mention that JC Penney burned through another $274 million of cash in the first quarter. Their equity has dropped by $1 billion in the last year, while their long term debt has gone up by $500 million.

In 2011 they had $5.5 billion of equity and $3.1 billion of debt. Today they have $1.8 billion of equity and $5.3 billion of debt. They are dead retailer walking. The only reason they haven’t gone belly up is the Federal Reserve manipulated ultra low interest rates that encourage mal-investment and keep zombie companies like JC Penney alive.

Being able to borrow at low rates will delay the end, but the end is still coming for this bloated dying pig of a company. The future is certain.

But don’t listen to me. Listen to Wall Street. This is the buy of a lifetime.



    1. Stephanie

      You don’t understand Wall Street. You tell everyone they are going to lose $180 million and when they ONLY lose $167 million they’ve beaten expectations. Buy buy buy.

  1. I’m aware hence my snarky comment. But in all seriousness why do they even bother to say they beat expectations anymore. For the past few years as companies crumble they always say they beat expectations. Scrapping the bottome f the barrel I suppose because rational business expectations are to continue to make a profit and not go bankrupt.

  2. Steph, when you’re a publicly-traded company making a profit is an option. It’s fantasyland, which is why small mom & pop businesses are the backbone of the real economy, cause on Main St. if you don’t make a profit, you don’t survive. I’m sure you already know this 😉

  3. Companies – big ones anyway – can survive a very, very, VERY long time without making a profit.

    What they cannot survive is negative cashflow.

    For instance, it is entirely possible for a company to be “losing” money but actually have positive, perhaps enormously positive, cashflow.

    The easiest way to see that this is possible is via depreciation. For instance, there are companies that have vast capital improvements that get depreciated x% a year. This $x amount gets deducted as an expense each year. If the amount is large enough, it can create a situation where the company is cashflow positive yet is losing money.

    For instance, say a company has sales of $100, and expenses of $80 not including depreciation. Depreciation is $25. So the company is generating $20 in cash (100-80), but is booking a loss of $5 in this example (100-80-25).

    It is one of the reasons airlines, in particular, can survive for very long times while losing money.

    I do not know what JC’s situation is, but it is likely that a lot of the loss is being generated by depreciation. The cashflow position could well be significantly different.

    Admin could likely tell us a lot more re that.

  4. JFC, if I ran Pennys, I’d run, then claw hand over foot, to set up an Amazon type operation.
    That’s the future for retailing.
    Figure it out.

    Big online retailers, like Amazon, and like Pennys could be, can carry far more inventory at far less overhead than their brick and mortar store counterparts.
    Also, in terms of time and money, it’s much cheaper for me and the average Jane or Joe to shop on line. Click, click, click and you’ve seen all the selections and, with another click what you bought is on the way. It takes less time than getting dressed and starting the car. Usually the online price beats local shopping which is a treat. Also, you spend no money on gas or auto wear and tear by shopping online. Gratification is delayed, that’s true, but depending on how much you’re panting for what you want, satisfaction doesn’t have to be postponed more than a day or two.

    For me it’s click on the Amazon ad on TBP then buy online and enjoy the thrill of more mail or a package on the doorstep. Oh, and I feel good about Amazon dropping a few pennies in Jimbo’s piggy bank so he can keep posting articles for me to comment on.

  5. Kohl’s reports weak sales growth, stock falls

    Kohl’s Corp. posted disappointing sales growth in the first quarter after a weak February, though the retailer logged a surprise increase in profit.

    Shares fell 5.7% in premarket trading.

    Chief Executive Kevin Mansell said sales accelerated in March and April and noted that margins improved as the company had a “more balanced promotional calendar.”

    As a middle-market department store, Kohl’s has been squeezed on the high end by Macy’s Inc. and on the lower end by Wal-Mart Stores Inc. and Target Corp.

    But recent upbeat results indicate that retailers catering to lower income Americans are making a comeback, a sign that a battered segment of consumers is on the mend.

    Last year, Kohl’s outlined a multiyear plan to return to growth, which included stocking better products, offering more compelling savings, tailoring offerings to local tastes and attracting top talent.

    In the latest quarter, Kohl’s reported sales excluding newly opened or closed stores grew 1.4%, compared to a year-earlier decline of 3.4%. Consensus Metrix had forecast growth of 2.6%.

    Overall, for the quarter ended May 2, Kohl’s reported a profit of $127 million, or 63 cents a share, up slightly from $125 million, or 60 cents a share, a year earlier.

    Sales grew 1.3% to $4.12 billion.

    Analysts polled by Thomson Reuters had expected per-share earnings of 55 cents and revenue of $4.19 billion.

    Gross margin improved slightly to 36.9% from 36.8%.

    On Wednesday, Macy’s detailed plans to push its best stores upscale, as it works to squeeze more growth from a slowing department store business.

    The plans came after the retailer reported a second straight quarter of weak sales, citing rough winter weather, trouble with West Coast ports and lower spending by tourists.

  6. @Llpoh, that is only positive IF, and this in our modern age of Executive/Board pirates stripping everything bare, IF the company is not leveraged to the hilt with loans that require covenants. Have you ever seen a business loan without covenants?

    These covenants would demand either total, instant, repayment, or increased interest rates.

    While the band plays on, like today, the corporation just pays more interest.

    When the market drops and the reality in the price of commercial/retail property reverts to mean (and truly, in a country with few real jobs, our commercial property is VASTLY overvalued right now), the banks are going to start yanking these notes.

    Which is EXACTLY what happened last time.

    Here is the difference, in ’08 the Federal Reserve and the Treasury embarked on a few trillion ways to keep this balloon inflated.

    What will they do this time?

    Look out below. The reality of little production, little true income and lots of mandated bullshit expenses is going to hit retail hard, and first.

    I was biting my tongue listening to my brothers in law talk about how valuable their new Apple stocks are going to be.

    This is going to end spectacularly.

    And, no worries about the JCP, their crap website is going to start selling Sephora items, so just like their “Home Stores,” all is freaking great. Yep, profits and shiny new Benz’s for all.


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