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Oppenheimer defends J.C. Penney (JCP -1.1%) on its view that behind all the sound and fury a...

Oppenheimer defends J.C. Penney (JCP -1.1%) on its view that behind all the sound and fury a real turnaround is taking place. On the topic of the $10 coupons sent to customers in a move that appears to be a bit of a retreat from the retailer's previous strategy, Oppenheimer says Ron Johnson is proving to be "increasingly nimble" in his actions. What will the investment firm call a 20% drop in quarterly sales if it comes down the pike again?
Comments (15)
  • june1234
    , contributor
    Comments (2339) | Send Message
     
    It will call it the same thing they call all "not as bad as expected" news and the stock should rocket forward.
    12 Oct 2012, 01:32 PM Reply Like
  • Bob Haller
    , contributor
    Comments (108) | Send Message
     
    In the industry I have spent my lifetime in, the bean counters move in with lofty plans to triple income, and in 3 cases killed the company that was profitable just not profitable enough
    12 Oct 2012, 02:22 PM Reply Like
  • PDT
    , contributor
    Comments (343) | Send Message
     
    @Bob Haller: You have 16 comments, all of which were slagging JCP and Ron Johnson.

     

    We get it, you don't like him, you don't like beancounters, and you don't like the "gay agenda" (whatever that is).

     

    No offense intended, but I'd respectfully urge you to get a more healthy hobby. You sound very bitter about something. Perhaps you feel like beancounters were responsible for you losing a job in the past. (If so, you have my sympathies.)

     

    But the truth is, people come to Seeking Alpha for perceptive analysis and insight regarding stocks and the financial markets. We do not come here to read about your personal feelings. Random anecdotes about an individual store in some random, unnamed city aren't useful either. And neither are emotional, personal jabs directed at CEOs or an entire corporation.

     

    In short, if you have something substantive to say, please share. Otherwise, you've got the wrong audience.
    12 Oct 2012, 03:40 PM Reply Like
  • gmom3
    , contributor
    Comments (132) | Send Message
     
    Thank you PDT for your post on this. I had also noticed that the comments from Bob have been consistently negative, too. I thought if I felt that way about a company/store then I would just move on and not obsess about it. IIf his local store is as bad as he continues to harp about then either the store will close or at the very least the company would get new management who can hire people who are embracing the transformation. The big picture is there and a lot of people do not yet understand what is all going to come together and complete the picture.

     

    I work at a jcp and I have tried to give some positives I have observed recently from beiing there on the "home front". I really don't think the company is on the brink of destruction. They told us from the very beginning that we would be weathering some difficulties for at least a year. I am excited about the changes going on and I look foward to seeing the complete transformation. I can tell that our store's traffic has picked up considerablly since August. The jcp line is really doing well nationally and definitely at our local store is it doing well. I have also noticed several customers have returned to the store to buy again in the past weeks. I also hear a lot more positive comments from customers about the new look of the store especially if they hadn't been in the store for a long time.

     

    Tonight I had a customer that had a difficult size to find a fit for. The wife commented that they didn't like to shop but they preferred to shop at jcp because we usually knew our product and how to help them. Those kinds of comments are becoming more frequent after many months of slow traffic and sometimes muttered negative comments while the construction was going on.

     

    It all comes down to excellent customer service that is going to make the transformation succeed. A coupon here and there will not be a problem. Having mulitple coupons each week WAS a problem. I do hope jcp never goes back to those days.
    12 Oct 2012, 10:34 PM Reply Like
  • retailgirl
    , contributor
    Comments (123) | Send Message
     
    Exactly. I too work for JCP and this $10 gift card, or coupon, was a great idea. I've seen immediate results in our dept. Brilliant, keep up the good work.

     

    Now, if we can have a similar promotion for Black Friday....ohh, laa, laa!!!
    13 Oct 2012, 09:52 AM Reply Like
  • PDT
    , contributor
    Comments (343) | Send Message
     
    @gmom3: Happy to contribute, but I'm afraid my point went over Bob's head (judging by his latest comment).

     

    I do this for a living, and I realize most people don't have the time or background to do full-blown DCF models, or deep dive research, so I try to help the SA community where I can.

     

    But I've been increasingly disappointed with the lack of quality input around here. Folks don't seem to get that while they may not like the direction a CEO is taking a company, to be successful as an investor, one needs to set aside emotions. Also, broad statements about Johnson "running it into the ground" or that "the stock will crash and burn" simply aren't useful. They are conclusions without proof, or even loose support.

     

    On the other hand, hard data, and even anecdotal info (like you've shared), really is useful. A lot of money can be made when things turn from horrendous to just kind of ugly. I suspect JCP is in that grey-zone right now.

     

    I can understand skeptics wanting to wait until JCP shows improving metrics for a couple quarters, but in my experience, waiting for the irrefutable confirmation often means missing the opportunity. The market moves quickly, so the goal is to figure out when a situation is turning *before* it becomes obvious to everyone.

     

    Please note, I am not saying JCP is a guaranteed winner from here. I just understand that the turnaround strategy was always going to take more than a year, and I see reasons to infer that traction is taking hold. Will the market bid JCP up soon? I really don't know.

     

    Anyway, thanks for the kind words, and also for sharing your firsthand observations.
    15 Oct 2012, 12:29 PM Reply Like
  • GeorgeMason
    , contributor
    Comments (129) | Send Message
     
    As have you, PDT. Your personal opinions carry no more weight than any other yahoo.
    15 Oct 2012, 05:25 PM Reply Like
  • PDT
    , contributor
    Comments (343) | Send Message
     
    @GeorgeMason: I guess I evaluate each case based on logic and supporting evidence. I don't care if you learn anything or not.

     

    But you missed the point; this amateur (Bob Haller) is using the comment section on any and every JCP related post as his personal psychiatrist's couch. His whining, crying, and moaning is boring and pointless.

     

    I'll talk slow so you and Bob can follow me...

     

    No serious investor cares about some dimwit's personal feelings are about JCP (or any other) stock!

     

    We don't care that he hates the CEO and wants the guy fired.

     

    We don't care if he dislikes the changes to his local store.

     

    And unless he has some compelling evidence in the financial statements to back it up, we don't care if he thinks the company will "crash and burn." (I haven't seen such evidence in my analysis, but I'm willing to consider it if someone else can point to any. But don't try and BS me. You need to know your way around the financials and the difference between bankruptcy, restructuring, or recapitalization.)

     

    Know what we care about? Return on our invested capital.

     

    I've learned useful info from pros and amateurs here. If the logic and evidence are there, I recognize and appreciate the value. You and Bob are not adding value, and it's not because you aren't pros. It's because you're just whining and complaining.

     

    So, you can keep crying about what a meanie Ron Johnson is, how you liked JCP better before, and about how you think the haircuts, gay-friendly ads, etc. were dumb. Nobody cares, because unless you are going to be appointed CEO by the Board, your personal opinions are irrelevant.

     

    I think you guys mistook this for a support group of some kind.
    25 Oct 2012, 06:44 PM Reply Like
  • GeorgeMason
    , contributor
    Comments (129) | Send Message
     
    Just as your personal opinion doesn't count. Q4 will be down another 20% and sales are down 33% year to date, that isn't a personal opinion, that's cold hard facts.
    26 Oct 2012, 01:42 PM Reply Like
  • retailgirl
    , contributor
    Comments (123) | Send Message
     
    $10 coupon. Brilliant.
    12 Oct 2012, 09:11 PM Reply Like
  • Bob Haller
    , contributor
    Comments (108) | Send Message
     
    I think the store and stock will crash and burn. Ron is wonderful at making lofty claims abot the future and comparing JCP with apple and target.
    Its time his claims are backed up with more than him. Say something other than more sales drops. It appears the next report will be more than another 10% loss. Thats around a 1/3 drop for the Ron era:( Historically has any other retailer ever seen such a loss of sales and survived? Has any other retailer seen such a drop in such a short time?

     

    I feel for my elderly family members who depended on JCP for a large part of their retirement. Rons vision is killing them....

     

    Ackman and the board are standing by doing nothing while the house burns.....

     

    Gmom3 its good you still work at Penneys around here they are laying off the experienced workers or cutting their hours to near zero so they can hire new part timers with no experience

     

    Incidently the bean counters suits at Dish Network are doing their magic there too.. I no longer follow it closely but they have shrunk by nearly one million subscribers thanks to new management:( Charle Ergen is still supposedly in charge but lost interest in the day to day operations. I was once a dish insider, attended a satellite launch as a VIP ....... after new management took over I dropped them as a subscriber...

     

    My lack of comments on other companies is really driven by my being so busy......
    14 Oct 2012, 10:55 AM Reply Like
  • gmom3
    , contributor
    Comments (132) | Send Message
     
    Hey, Bob, I have worked at jcp over 15 years so I count myself as an experienced worker. Cutting my hours? Nope, that is not the case. When I switched departments late summer, they told me I would have about 20 hours a week. That was more then triple of what I had in my previous department. I have had more like 30+ hours in recent weeks. I work with many people who have been at jcp either longer then myself or have been there at least several years. The new people they have been hiring are an interesting group - hard working, dress very stylish and are very good with customer service.

     

    I think those of us who are flexible for availability are the ones who are getting the hours. A lot of people who are part timers work another job or go to school so they do not have the availability. Also, the store is very aware of who the hard workers are, who is embracing the HUGE focus on customer service and who are team players and are positive. Most of the people who were not happy with the changes coming seemingly every week are no longer there by choice - either themselves or the management made that choice.

     

    I just am not worried that I will lose my job at jcp. Also, we were told from the very beginning that it would take at least a year for the changes/transformation to see the positives. Around here, we are seeing the increase in traffic and sales in the past several weeks. Hang in there, Bob, jcp just might surprise you despite all your certainty! Your relatives might not lose everything in the end with their stock.
    24 Oct 2012, 08:59 PM Reply Like
  • june1234
    , contributor
    Comments (2339) | Send Message
     
    One analyst said JC Penny is trying to re-brand itself targeting the high end consumer or higher end one than JCP's traditional market. Tough one. When I think of JCP I think of Sears, Kmart not Macy's or Bloomingdale's
    18 Oct 2012, 06:50 PM Reply Like
  • GeorgeMason
    , contributor
    Comments (129) | Send Message
     
    I'm with you june1234, since this new guy changed everything I think of Kmart & Walmart quality when I even bother to look in JCP.
    23 Oct 2012, 06:36 PM Reply Like
  • Bob Haller
    , contributor
    Comments (108) | Send Message
     
    looks like another 20 some percent sales drop is coming to the next report. has any retail CEO done this much damage this fast?
    24 Oct 2012, 04:26 PM Reply Like
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