Why JCPenney Stock Rose on July 13
Stock rose on July 13
Shares of JCPenney (JCP) and other retailers rose on July 13. Target (TGT) indicated upbeat same-store sales for fiscal 2Q17, which built optimism for other retailers. JCPenney stock rose 7.8% on July 13. Target, Macy’s (M), Nordstrom (JWN), and Kohl’s (KSS) stock prices rose 4.8%, 4.1%, 1.5%, and 4.8%, respectively, on July 13.
On July 13, JCPenney announced that it will introduce toy shops in all of its physical stores. The move reflects JCPenney’s strategy to look for growth beyond apparel.
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Since last year, JCPenney has doubled the number of toys on its website. The company also added several new toy categories on its website after it received positive feedback from customers. These categories include bicycles, video games, outdoor trampolines, costumes, and science kits. With the introduction of toy shops in over 1,000 JCPenney locations, the company aims to boost its store traffic.
By offering an extensive collection of toys from popular brands like Hasbro, Mattel, and Fisher Price, JCPenney aims to capture growth opportunities in the $20 billion toy industry.
Aside from the rise in the stock price on July 13, JCPenney stock also rose 1.8% on July 11. The company indicated a significant improvement in its fiscal 2Q17 sales. On July 10, JCPenney made an optimistic statement about its fiscal 2Q17 sales in a news release about the departure of its CFO Edward Record.
Edward Record relinquished his position as JCPenney’s CFO effective July 11 to pursue other interests. The company named Andrew Drexler, senior vice president, chief accounting officer, and controller, as the interim CFO.
Despite the rise in JCPenney’s stock price over the last three days, the stock is still down significantly on a YTD (year-to-date) basis. As of July 13, JCPenney stock is down 40.1% on a YTD basis. Department store stocks have been battered following persistent weakness in sales over the past few quarters. As of July 13, Macy’s, Nordstrom, and Kohl’s stock prices are down 38.3%, 1.3%, and 21.2%, respectively, on a YTD basis.
Department store stocks have underperformed the S&P 500 Index, which has risen 9.3% on a YTD basis as of July 13.
In the next part, we’ll look at JCPenney’s sales.