Iconic American departmental store chain J. C. Penney (JCP Stock Chart) has been in trouble for some time now. It has been reflected in the company’s plunging penny stock price. However, the stock price reached a new low last week when it dropped below the $1 mark and dipped as low as $0.80. This is the lowest level for the historic company that was founded in 1902.
Over the past month, the stock has plunged over 35% and much of the selloff is due to the company’s first quarter result. It could not quite give an indication regarding the future of the company.
Will J. C. Penney Survive?
Experts who have followed the business for some time believe that J. C. Penney is now in dire straits. They also believe that it is likely that the company might not actually survive. The churn in top-level management has been continuous. Despite the goodwill enjoyed by the current Chief Executive Officer Jill Soltau, the future is bleak for the department store chain.
As far as the company’s concerned, customer retention and foot traffic ultimately decide the future of the company. For a long time, the company has proven to be a disappointment for most of its customers. Many of them are not likely to return to the store.
Sales have been plunging at an alarming level. In Q1 2019; the company recorded a 5.5% drop in sales. In the previous year’s period, it had actually shown a slight growth of 0.2%. Only a few categories of products showed any kind of growth and overall J. C. Penney had nothing positive to show in terms of sales or profit. This has echoed a similar sentiment for JCP stock.
Losses came in at an unsustainable $154 million, while cash outflow stood at $268 million. In the year-ago period, the same figure stood at $421 million. The company is currently trying to close down unprofitable product categories and performing extensive research on customers, in order to reenergize the store. Comment below on what you think the future of this penny stock will be.