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JCPenney CFO Departs, Stock Up on Q2 View & Rewards Program

J. C. Penney Company, Inc.’s JCP chief financial officer (CFO) Edward Record has stepped down from his post effective Jul 11 to pursue other interests. Record joined the company as CFO in Mar 2014.

During his tenure, the company improved its revolving credit facility, received several credit rating upgrades and most importantly managed to lower debt burden by $1.4 billion. However, it still has high-debt levels and requires more effort to lower the same in the future. At the end of the first quarter fiscal 2017, total long-term debt was $4,066 million, reflecting debt-to-capitalization ratio of 77.1%. Earlier, the company had announced plans to lower net debt to EBITDA ratio to less than three times by fiscal 2017.

Record said “JCPenney is well positioned for the future, and I will continue to follow the company closely as the team builds on the positive momentum it has experienced over the last few years.”

Meanwhile, J. C. Penney which shares space with Macy's, Inc. M stated that the sales performance has improved in the second quarter. Moreover, the company announced that it expects to post substantial improvement in the top line in the second quarter in comparison with the first quarter.

Following, the news the stock gained nearly 2% yesterday. However, if we look at the company’s share performance in the past one year it has been impacted by lower-than-expected top-line performance in the past five quarters and weakness in apparel. The Zacks Rank #4 (Sell) company’s stock has plunged 46.3%, wider than the Zacks categorized Retail-Retail-Regional Departmental Stores industry’s fall of 28.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

JC Penney Revamps Loyalty Program

Apart from CFO departure and sales update news, the company also announced a fresh and better J. C. Penney Rewards program. In an effort to lure more customers and ramp up sales performance, it has enhanced the loyalty program which was introduced for the first time in 2008.

Per the new reward program, every customer will get $10 reward for every 200 points earned. Further, there is no cap for receiving the reward of $10 per month. For all active J. C. Penney customers any leftover points will rollover from one month to next month instead of expiring. Meanwhile, JCPenney credit cardmembers will get one point for each dollar spent.

Moreover, J. C. Penney Rewards member can get exciting offers throughout the year. The company’s cardmembers will get extra benefits like exclusive coupons as well as invitation-only shopping events.

In an era of challenging retail landscape, most of the retailers are using loyalty program as a tool to attract and retain existing customers. Retailers such as Ulta Beauty, Inc. ULTA and Kohl's Corporation KSS have 24.5 million and 30 million, active customers under their own loyalty program, respectively. Ulta’s 24.5 million active customers garner above 80% of the company’s sales. We believe J. C. Penney enhanced loyalty program will help to attract more customers.

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Ulta Beauty Inc. (ULTA): Free Stock Analysis Report
 
Macy's Inc (M): Free Stock Analysis Report
 
J.C. Penney Company, Inc. Holding Company (JCP): Free Stock Analysis Report
 
Kohl's Corporation (KSS): Free Stock Analysis Report
 
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