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Similar to other departmental stores, same-store sales at J C Penney Company Inc (NYSE: JCP) significantly slowed in 1Q, with transactions and AUR both turning negative.
UBS’ Michael Binetti maintains a Sell rating on the company, while lowering the price target from $8 to $7.
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Same-Store Sales Trends
Pointing out that 1Q was the first negative year on year gross profit decline during JC Penney’s turnaround, Binetti mentioned that the company reaffirmed its 2016 guidance despite the “ongoing sluggish trends.”
However, the company would need consumer trends to improve to be able to achieve its guidance for 2016, although JC Penney is the only departmental store in UBS’ coverage to witness sequentially tougher same store sales compares in 2H.
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Will Trends Improve?
“While JCP commented that recent trends have improved, the overall negative industry tone this week leaves us more cautious about the sustainability of any near term trend improvement,” Binetti stated.
The analyst expects the company’s same store sales to eventually migrate towards the trends being witnessed by its peers, which are “accelerating to the downside.”
The EBITDA estimate for FY16 has been lowered from $988 million to $972 million, while the FY17 estimate has been reduced from $1.17 billion to $1.15 billion.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.