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January 10, 2014
12:53 EDTSHLDSears dives after negative preannouncement
Shares of Sears (SHLD) are tumbling after the retailer's fourth quarter earnings guidance came in below analysts' expectations. WHAT'S NEW: Sears last night estimated that its fourth quarter loss per share excluding certain items would be ($2.01)-($2.98), versus analysts' consensus estimate for a loss of (20c). Moreover, the retailer stated that its U.S. comparable store sales for the fourth quarter had fallen 7.4%, versus the same period a year earlier. Comparative sales at the company's Kmart stores dropped 5.7%, while comp sales at its U.S. Sears stores tumbled 9.2%. ANALYST REACTION: In a note to investors, Credit Suisse analyst Gary Balter called Sears Holdings earnings shockingly bad and warned that the retailer is losing market share. Given the market share losses and Sears' decision to sell off its strongest performing stores, the company has little chance of mounting a successful turnaround, Balter believes. Moreover, the company is reducing the value of its assets by $10-$14 per share each year it continues to operate, according to Balter. Suppliers are likely becoming concerned about Sears' situation, according to the analyst, who kept an Underperform rating on the shares. PRICE ACTION: In early afternoon trading, Sears sank $4.80, or 11.3%, to $37.75.
News For SHLD From The Last 14 Days
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September 30, 2015
09:12 EDTSHLDSears volatility at low end of 52-week range
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September 28, 2015
10:18 EDTSHLDJ.C. Penney rises after CEO meeting prompts upgrade
Shares of J.C. Penney (JCP) are rising in morning trading after a Sterne Agee CRT analyst upgraded the retailer to Buy with a $13 price target following a meeting with the company's new chief executive officer. WHAT'S NEW: Sterne Agee CRT analyst Charles Grom upgraded J.C. Penney this morning to Buy from Neutral with a $13 price target after recently spending time with new CEO Marvin Ellison at the company's headquarters. Grom said he came away from the meeting "more confident" in the company's turnaround plan, adding that Ellison has the "right demeanor" and business sense to lead the company and "right the ship." Ellison took over as CEO of the retailer on August 1, replacing previous CEO Myron "Mike" Ullman. Sterne's Grom said that while the firm has previously been critical of the retailer's strategy, he believes the initiatives, led by Ellison, are "refreshing" and could boost the company's EBITDA. Grom thinks Ellison is the right person to help revive J.C. Penney and believes the company can surpass its long-term EBITDA target of $1.2B by 2017, saying that this goal "may prove to be a floor rather than a ceiling." Additionally, the analyst sees "multiple levers" to drive same-store sales higher. Despite his optimism in J.C. Penney's recovery story, the analyst notes that U.S. consumer spending is shifting away from traditional items in department stores toward move service-oriented products, traditional mall traffic trends remain "suppressed" and weather trends across the U.S. in August and September were not "ideal" for mall-based retailers. WHAT'S NOTABLE: J.C. Penney recently named John Tighe as executive vice president and chief merchant, effective October 1. Tighe, most recently senior vice president and senior general merchandise manager for the men's, children's, footwear, handbag and intimate apparel divisions, will succeed Elizabeth "Liz" Sweney, the company said. On August 31, Deutsche Bank analyst Paul Trussell upgraded J.C. Penney to Buy from Hold and raised his price target on the stock to $12 from $10, calling the company a "self-help story." Trussell noted that the company has already improved its merchandise mix and is now moving toward better pricing and fewer markdowns. Trussell said that the company's target of mid-single digit same-store sales growth looks "achievable" and its brands and assortment "look right." OTHERS TO WATCH: Other department store operators include Macy's (M), Kohl's (KSS) and Sears Holdings (SHLD). PRICE ACTION: J.C. Penney is up 1.5% to $9.57 in morning trading and is up nearly 50% year-to-date.

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