J.C. Penney shares plunge on short-term outlook
The department store's stock was among the biggest decliners after the retailer told analysts it expects its financial struggles to continue during the second half of the year.
The company also will widen its aisles and introduce new self-checkout options to improve the shopping experience. And it is adding coffee, candy and gelato stands to keep shoppers hanging around.
J.C. Penney hopes the stores will help move its image from dowdy and dated to upscale and trendy, without losing its value edge. Some industry experts remain skeptical.
“We want to believe this can work, and longer term, we think it will. But this has been, and will likely continue to be a roller coaster ride with many ups and downs,” Nomura Equity Research analyst Paul Lejuez said in a research note, in which he kept a “Neutral” rating on the company's shares.
The analyst said the company's ideas are impressive and transformative. However, he remains concerned about when sales will turn around and the execution risks that come along with some of the big changes. He also questioned the company's plans to only improve 700 of its 1,100 stores.