Ask Matt: Can J.C. Penney remain relevant?

Q: Can J.C. Penney remain relevant?

In this Friday, July 10, 2015 photo, a car drives through an empty J.C. Penney department store parking lot at the Hanover Mall in Hanover, Mass.

A: J.C. Penney (JCP) is undergoing a difficult turnaround. Not only does it need to fix itself after years of missteps – it has to do so during a challenging time for most physical retailers and department stores. Investors are likely best served waiting until the recovery is further along.

J.C. Penney’s first-quarter results show how the department store chain continues to struggle, but is still head of plan. The company reported an adjusted quarterly loss per share of 32 cents a share, which was less than the 57 cents a share the company lost in the year-ago period. The loss in the first quarter was also better than the 37 cents a share analysts thought the company would lose, says S&P Global Market Intelligence.

Given the company is losing money – and is expected to continue losing money – it’s a difficult investment for most to make. Analysts rate the stock a hold on average, indicating the sort of wait and see attitude toward the company’s strategy. The company is pushing its appliance business and also aims to expand its windows coverings business. Analysts think the company will pull itself back into the black in the current fiscal year. But it’s a difficult environment given that revenue is only seen rising 2.6%.

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USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at [email protected] or on Twitter @mattkrantz.

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