Penney's shares up amid encouraging words from CEO
NEW YORK (AP) — Shares of J.C. Penney Co. Inc. rose Monday after its CEO Mike Ullman reiterated that business is improving.
THE SPARK: The company said Ullman told investors at a conference sponsored by apparel trade paper WWD that a key sales measure should see a gain coming out of the third quarter. The figure is based on revenue at stores open at least a year and is considered a key indicator of a retailer's health. It marked the first time since late September that J.C. Penney has reassured investors that business is improving.
THE BIG PICTURE: Penney is trying to recover from a botched transformation plan spearheaded by its former CEO Ron Johnson, who was ousted in April after 17 months on the job. Johnson was fired two months after the company announced horrific fourth-quarter results that covered the holiday shopping season. That ended a fiscal year, which finished Feb. 2, in which the Penney amassed almost a billion dollars in losses and a 25 percent drop in sales.
Penney brought back Johnson's predecessor, Ullman, as CEO. He is restoring frequent sales and basic merchandise that were eliminated by Johnson who was aiming to attract a more affluent, younger shopper. But the company has continued to see losses and sales drops through the second quarter.
THE SHARES: Penney's shares rose 7.5 percent, or 50 cents, to $7.29 in early afternoon trading. Shares have lost 63 percent of their value since the beginning of the year and have lost more than 80 percent since early February 2011 when investors were bullish about Johnson's reinvention plan.