Why J.C. Penney Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of retailer J.C. Penney (NYSE: JCP  ) sank 11% on Tuesday after announcing that its president, Michael Francis, was leaving the company.

So what: The announcement comes just eight months after Francis was hired to assist in J.C. Penney's rebranding efforts, reinforcing concerns over just how difficult its turnaround is becoming. New CEO Ron Johnson seems to be requiring more and more control of the execution reins (CFO Michael Dastugue also left just a few months after Johnson's arrival), giving investors plenty of uneasy vibes about the corporate culture that is being cultivated.

Now what: Going forward, Johnson will assume direct responsibility of J.C. Penney's marketing and merchandising functions. Of course, given the high degree of sales uncertainty surrounding the company right now, I wouldn't be so quick to pounce on today's pullback. While the stock might seem statistically cheap, J.C. Penney just hasn't shown enough signs of life to deserve the benefit of the doubt.  

Interested in more info on J.C. Penney? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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Read/Post Comments (4) | Recommend This Article (4)

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  • Report this Comment On June 19, 2012, at 3:26 PM, mountainlovin wrote:

    I've boycotted JC Penney and sent them a postal letter to their investor relations explaining why.

    They have gotten involved in the culture war and have taken up sides with the radical left. Having Ellen as their spokesperson is great. No problem there. But, I do have issues with other marketing decisions which have caused me to take my business elsewhere (Home Depot is another ...).

    It is best for a company to stay out of the culture war.

  • Report this Comment On June 19, 2012, at 5:17 PM, mijluap wrote:

    the recent press comments caused my wife and to cancel our account/credit card.i pray that every conservative American does the same wrere i buy my family clothes and accessories should not use their profits to fight a culture war!!

  • Report this Comment On June 20, 2012, at 10:37 AM, DaroldB1940 wrote:

    My wife and I shopped for years at JCP, but since the Johnson revolution we have attempted to shop their stores twice. Both times a disaster. We won't be back. I don't know if JCP can survive running on their current track. We notified them in writing of our displeasure, and heard nothing back from them. We've moved on permanently.

  • Report this Comment On June 20, 2012, at 6:13 PM, constructive wrote:

    mountainlovin, mijluap,

    It is ironic that you accuse JC Penney of waging culture war. They are just running ads with people wearing clothes. You are the ones waging homophobic culture war.

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10/27/2016 4:02 PM
JCP $8.31 Down -0.10 -1.19%
J.C. Penney CAPS Rating: *