According to Barron’s November 10 edition, a deficit in J.C. Penney’s expected sales growth could make its stock fall down by 35%.
If the company’s stock will fall this much, it could mean that the department store will not have a good chance of achieving its long-term financial goals.
Expected to report its results for the third quarter of the year last Wednesday, J.C. Penney had placed its goal of 1.2 billion U.S. dollars in earnings before interests, taxes, depreciation and amortization or EBITDA by the year 2017.
Barron’s article said that the bounce in the sales of the company during the first six months of the year seems to fade and noted that a shortfall on its projected sales could lead to a cash problem for J.C. Penney.
A few weeks ago, the retailer cut its same-store sales forecast for the third quarter of the year looking at the poor sales in September and the challenging retail environment as the major reasons for the adjustment. J.C. Penney said that it projects low-one-digit growth percentage in its same-store sales from August to October after it initially forecasted a mid-one-digit sales growth percentage.
Last Friday, the shares of the listed department store closed at $7.82 on the New York Stock Exchange.