Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Bad News About Record-Low Unemployment - 24th June 19
Stock Market New High, but…! - 24th June 19
Formula for when the Great Stock Market Rally Ends - 24th June 19
How To Time Market Tops and Bottoms - 24th June 19
5 basic tips to help mitigate the vulnerability inherent in email communications - 24th June 19
Will Google AI Kill Us? Man vs Machine Intelligence - 24th June 19
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

J.C. Penney Still On Bankruptcy Path

Companies / Retail Sector May 13, 2016 - 04:04 PM GMT

By: James_Quinn

Companies

I find J.C. Penney to be a sick joke. The executives of this company think they can put out positive press releases and have their financial statements not properly show in the earnings press release to cover up the fact their financial results are deteriorating – not improving. CNBC will dutifully report the corporate lies. Checkout the press release where, for some reason, the financial results don’t format. Must be a glitch. Right?


http://www.marketwatch.com/story/jcpenney-reports-a-63-percent-increase-in-ebitda-to-176-million-and-reaffirms-full-year-ebitda-guidance-of-1-billion-2016-05-13

The press release heading makes you think business is booming. Whenever a corporation crows about EBITDA, you know they are covering up their true results. Of course, a company with $4.7 billion of debt wouldn’t want to include interest expense in the results they announce.

These rocket scientists owe their ongoing existence to Bernanke and Yellen. A company with this much debt and billions in losses over the last five years should be paying 20% interest on their debt. Instead they can finance themselves at 8% rates. This bloated pig should have gone belly up by now. That’s how creative destruction works in a free market. Their existence as a dead retailer walking brings down the results of other retailers, creating the current zombie retail environment. These retailers just plod along, losing money, buying back stock, and never dying. The Fed has created this Walking Dead Economy with their warped QE and ZIRP “solutions”.

If you go to JC Penney’s website, you can actually see their income statement, balance sheet and cash flow statement.

http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-newsArticle&ID=2168214

It seems the actual results are in complete opposition to the feel good press release put out by the feckless management of this carcass of a company. Here is a little truthiness about J.C. Penney’s real results:

Sales declined by 1.6% and comp store sales declined by 0.4%. Last year comp store sales rose by 3.4%. Does that sound like improvement?
Gross margin declined by $23 million, but they fired thousands of people, reducing operating expenses by $93 million. Slashing prices and firing employees really sounds like a turnaround.
It seems their crowing about EBITDA might be a little overdone. They continue to lose gobs of dough. Their loss for the quarter was $68 million.
The real disaster will not be discussed by the brain surgeons running this poor excuse for a retailer. They burned through $394 million of cash in the first quarter, 74% higher than last year’s burn. They only have $415 million of cash left.
Good management does not increase inventory by 4% when sales are falling by almost 2%.
Another $525 million of equity was evaporated in the last year.
I bet they wish they hadn’t bought back those hundreds of millions in shares at prices 3 or 4 times higher than the current price. Other retail CEO’s should take note, but they won’t. Their golden parachutes will protect them. Screw the shareholders.

To give you some perspective on how great J.C. Penney is performing, let’s compare their first quarter results to their 2007 first quarter results.

2007 1st Qtr Sales – $4.4 billion

2016 1st Qtr Sales – $2.8 billion

2007 1st Qtr Income – $238 million

2016 1st Qtr Income – ($68 million)

J.C. Penney sales have fallen by 36% since 2007. They have lost billions over this time frame. They have four times as much debt as they do equity. They have $2.5 billion of current liabilities and only $400 million of cash to pay off those liabilities. But, the bozo management thinks going into the low margin appliance business is going to save this sinking ship. Sorry bozo. You are going bankrupt. It’s just a matter of time.

Join me at www.TheBurningPlatform.com to discuss truth and the future of our country.

By James Quinn

quinnadvisors@comcast.net

James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and is writing these articles because he cares about their future. He earned a BS in accounting from Drexel University and an MBA from Villanova University. He is a certified public accountant and a certified cash manager.

These articles reflect the personal views of James Quinn. They do not necessarily represent the views of his employer, and are not sponsored or endorsed by his employer.

© 2016 Copyright James Quinn - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

James Quinn Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules