Department-store operator J.C. Penney
So far this week, Wal-Mart
In stark contrast, consumers heading to Penney's are arriving with their wallets open. The company's seeing strong trends among nearly every operating metric. Total second-quarter sales advanced 3.6%, and same-store sales improved a respectable 1.9%; the company had already posted strong 6.6% comps in last year's quarter. The start of the back-to-school season shifted into the quarter, and management cited particular strength in the Northwest and Southwest regions.
J.C. Penney's private-label business is outgrowing other merchandise categories. Penney's new labels that are proving popular to consumers, include Ambrielle, Liz & Co., and CONCEPTS, in a successful relationship with Liz Claiborne
Management expects single-digit sales and comps growth for the upcoming third quarter, and it increased its annual earnings projection by a penny to $5.50 per share. Over the next five years, it's sticking with long-term goals announced in April. Penney's expects double-digit annual earnings growth as it opens or relocates 50 stores each year over this time frame.
At a recent price of $63 per share, Penney's is trading at a very reasonable 11.5 times forward earnings. There will clearly be monthly sales fluctuations, including hot Julys and cooler Junes, but given the overall retailing landscape, J.C. Penney is the one to watch. I remain impressed by how effectively it has revived its business, especially since older-line peers such as Macy's, Dillard's
For related Foolishness:
- J.C. Penney Is a Shopping Fool
- The Best Stocks for the Next 10 Years
- Why You Should Beat Wall Street
Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.