If there’s an early favorite to be next year’s Best Buy, it’s probably JCPenney (JCP). Former CEO Ron Johnson couldn’t have screwed up this retailer more if he tried, and the market loves that JCP brought back Myron Ullman as CEO.
Ullman is doing an admirable job cleaning up his predecessor’s mess. Indeed, JCP stock is up 10% during the past month on signs of a burgeoning turnaround. But what a mess it is.
The decline in revenue has been less severe for two straight quarters, but it’s still dropping — and is essentially flat compared with its nadir of 2012.
JCPenney has won some customers back, but not nearly enough to avoid an ugly holiday selling season — one in which the only way to move merchandise will be margin-crushing discounts.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.