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J.C. Penney: Thanks For The Sell-Off


J.C. Penney announced a 9% reduction in its headquarter staff last week.

As a result, investors drove J.C. Penney's shares down ~9% on Friday.

The staff reduction does not imply that J.C. Penney's restructuring is faltering.

Expense management is going to support J.C. Penney's margins. Now is the time to buy, not to sell.

J.C. Penney (NYSE:JCP) is always good for a surprise, in both the good and the negative sense of the word. While the retailer surprised investors with a return to formidable, positive comparable store sales growth and improved margins in 2014/5, the company upset investors last week when news spread that JC Penney would cut staff at its Texas headquarters.

J.C. Penney has been a turnaround investment ever since the company raised equity capital at the end of 2013 in an effort to return to its roots and cater again to price-conscious middle-class shoppers after Ron Johnson's disastrous tenure alienated many of its customers. J.C. Penney did have measurable success in luring...