Stock Market Today: Has J.C. Penney Finally Reached the Bottom?

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.

Index futures are pointing to a flat start for the stock market today, with the Dow Jones Industrial Average (DJINDICES: ^DJI  ) set to fall by a single point at the opening bell. While earnings season is about over, a few big-name retailers -- J.C. Penney (NYSE: JCP  ) , Lowe's (NYSE: LOW  ) , and Staples (NASDAQ: SPLS  )  -- all stepped up to the plate this morning.

J.C. Penney store. Image source: J.C. Penney.

J.C. Penney reported a huge net loss of almost $500 million, or $1.94 a share. Adjusting for accounting charges, the red ink amounted to $1.81 per share in the third quarter, slightly worse than the Street was expecting.

Sales of $2.78 billion were also a bit lower than expected. Penney's comparable-store sales and gross margin both ticked higher, which means the company is entering the holiday season in the strongest position it's seen in a while. Still, for a retailer whose sales and profit are down 11% and 23%, respectively, so far this year, that's not saying much. Investors see a dim light at the end of the tunnel, though: J.C. Penney's stock is up 6.3% in premarket trading.

A day after larger rival Home Depot (NYSE: HD  ) reported a blowout third quarter, Lowe's announced its own solid earnings results. The company saw comparable-store sales rise by 6.2%, which was strong but not as impressive as Home Depot's 8.2% figure. Lowe's profit jumped by 34% to $0.47 a share, just a penny below the Street's estimates. CEO Robert Niblock sounded an optimistic tone on the future, saying, "The home improvement industry is poised for persisting growth in the fourth quarter and further acceleration in 2014." However, Lowe's raised its full year earnings and sales outlook to just $2.15 a share, below the $2.19 that analysts were expecting. The stock is down 3% in premarket trading.

Finally, Staples this morning booked $0.42 a share in profit on $6.1 billion in sales during its third quarter. Both figures were below last year's results but about even with Wall Street's expectations. Staples has been busy closing stores to adjust to the weak demand for its core office products, and despite help from new growth categories like tablets and online shopping, comparable sales still fell by 3% in the U.S. The stock is up 1% in premarket trading.

Go beyond the daily swings
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report, "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 20, 2013, at 10:24 AM, anindakumars wrote:

    This report is too late on the matter. Anyone who has followed JCP over this year will know that the worst is over. JCP was a buy a month earlier but now its neutral/ hold for me.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2735596, ~/Articles/ArticleHandler.aspx, 10/22/2014 8:40:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement