JC Penney (JCP) came up with disappointing results and investors sold off the stock. If you believe the economy is experiencing some problems, you are not surprised. If you were surprised... well, what can I say?
Listen to some of the excuses that management is throwing on the table. They are blaming everything on bad weather, high fuel prices and sub prime induced credit problems as well as declining housing prices. It would appear that they are not concerned about anything that they were doing.
Myron E. (Mike) Ullman, III, Chairman and CEO of JCPenney commented:
Notwithstanding the difficult retail environment, our team is focused on the fourth quarter and beyond, and is working to seize opportunities to improve operating performance. For the upcoming holiday season, we are confident that our customers will find highly compelling merchandise assortments and smart prices supported by a competitive promotional calendar.
At this point, when you consider the fourth quarter it's all over. The merchandise strategy has been decided and rolled out. Other than last minute price adjustments, what is really doable? Ullman continued to say:
As we look ahead, we continue to believe the strategies in our Long-Range Plan provide the best opportunity to achieve sustainable growth over the longer term. However, in light of the expected weak retail environment, we will be taking a cautious approach to planning our business for the fourth quarter and 2008.
Doublespeak and bafflegab. JC Penney, you are free falling and wondering if the parachute will open up. Management needs to be prepared for bad times. Right now its only just starting to occur to you that there is a problem.