Here is the Quick & Dirty on JC Penney Analyst Day
Here is the quick and dirty on JC Penney: the market loves to buy on the hope of a completely reimagined department store shopping experience instead of paying any attention to the company's fundamentals. Although I have had a sell rating on the stock since January, clients are asking me a few basic things I will be looking for to decide whether to become more optimistic. Below is that list. I will be rocking updates on the impending circus on Twitter @BrianSozzi
•Traffic declined 12% in 2Q12, it had to have improved during back to school amid the free haircut push (aka offering of traffic driving services). If so, it suggests a new customer (40 years old and under) is getting engaged with the new JC Penney shopping experience. Moreover, a traffic improvement will have arrived amidst slowing GDP growth and other department stories quietly stating they are taking market share during JC Penney's upheaval. Positive signs.
•Color on the progress of fully set remodels. If on plan or ahead of plan, then one could start to think of a world with less gross margin killing markdowns on excess goods not fitting with the team's new merchandising strategy. (Though I continue to have concern on the inventory and overall strategy on those locations not receiving full remodels.)
•Color on any surveys done, specifically on price perception. Obviously looking for improvement with the shift back to a model that resembles old school retailing practices.