J.C. Penney: A Review Of Future Capital Expenditures
- J.C. Penney's capital expenditures are significantly lower than historical averages right now.
- Due to the store renovations during the Ron Johnson era, there is likely limited need for additional updates and renewals for several years, making lower capital expenditures reasonable.
- By 2019 though, it is likely that capital expenditures will rise back to the $425 million to $525 million range.
- J.C. Penney needs to reduce interest expense (or store count) in the interim five years, otherwise $825 million to $925 million EBITDA is needed for breakeven cash flow.