JC Penney (NYSE:JCP) is working hard at restructuring which means red ink before black. Because the surgery will not look pretty they want to do away with the guidance for the rest of the year. This will protect the weak and squeamish investors for reality. well at least for a few more quarters.
But they did give a secret clue to performance. Ready here it is. They claim they will have $1 Billion by year-end. So for a retailer that means after the Christmas inventory build and January Sales on Jan 31, 2013. JC Penney will have $1 Billion of cash in the till. They currently have $888 million. If you are Chinese 888 is a lucky number and brings good fortune.
If you are an investor with a penchant for arithmetic JC Penney has promised for the last six months positive cash flow of $112 million all in. I assume of course that nor borrowing or other types of cheating will be involved.
OK buddy you got something to prove. We are now half way through Aug. Your Christmas strategy has to be in place. That’s a big, bold, shiny promise.
So Merry Christmas and Happy Holidays in advance.
George Gutowski writes from a caveat emptor perspective.
- JC Penney Blows Up Again (businessinsider.com)