J.C. Penney -61%
Compare with: SPDR S&P Retail (XRT) +37%
J.C. Penney (JCP) is having a store wide 50% off sale, but unfortunately it’s on the value of its stock. A favorite of short sellers, this retailer is struggling in the face of an economy that has been especially tough on stores that cater to the lower middle class.
It doesn’t sound all that bad when you read headlines about the company: sales and gross margins aren’t falling as quickly, but read between the lines and it clearly shows a $489 million third-quarter loss in sales. J.C. Penney loses 18 cents on every dollar of sales it makes, reflecting a poorly executed discounting strategy.
Some analysts even suggest the company will need to borrow serious cash to get through 2014 or potentially face bankruptcy. Until J.C. Penney can lure customers through the doors without such deep discounting, there’s no end in sight to the downward spiral.
Just say “no” to J.C. Penney stock in 2014—even at 50% off fire-sale prices.