J C Penney Company Inc (NYSE:JCP) has finally started moving up the charts, reporting an increase of 10.6% in the month of August alone. Much of this spike was driven by a recent financial report from the company, with some assistance from analyst upgrades. Currently, the company has set its eyes on achieving a target of $1.2 billion in EBITDA, by the year 2017.
Deutsche Bank analyst, Paul Trussell, believes that the company has the potential to achieve this goal. Additionally, Trussell also identified a number of opportunities that lie ahead for J C Penny to achieve their goal. The two of the most highlighted opportunities included improving store presentation to drive sales and integrating new technology to control markdowns. J C Penny, under its last CEO, Ron Johnson, suffered significant setbacks in terms of sales. However, the new chief, Marvin Ellison, and his merchandising team have been working hard to help the company regain a firm footing.
The efforts of Ellison can be seen in the company’s 2Q2015 report. As per the filing, comparable store sales climbed by 4.1%, which was well above the analyst expectations. Furthermore, the report also highlighted an increase of just 1% in gross margins, which now stand at 37%. This can also be associated with the fact that the operating costs of the company have declined by 6.5% over the past year. Unfortunately, despite the efforts of Ellison and his team, J C Penny is still non-profitable. The company still has to overcome an operational loss of $38 million, if it wants to become profitable. It is important to note here that the operational loss has declined to half its value, as compared to the preceding year. The company has a total of 87-million loyal customers and Mr. Ellison is trying to get them to visit the store more frequently and increase their spending.
J C Penney Company Inc (NYSE:JCP) reported a slight increase of 0.41% to the share price, in the afterhours of the September 14 session, despite experiencing a trading volume of 8.02 million shares to close at a share price of $9.74.