Moody’s: J.C. Penney Faces Lofty Sales, Profit Goals


WWD

J.C. Penney Co. Inc. has made “significant” progress since Myron “Mike” Ullman 2nd’s return as chief executive officer nearly two years ago, but will need to step up its game if it’s to meet the upbeat projections — and substantial debt maturities — awaiting ceo-designee Marvin Ellison.

According to a study by Scott Tuhy, vice president and senior credit officer at Moody’s Investors Service, Penney’s outlook for growth in sales and profitability over the next five years, laid out at an October Investor Day, tends to err on the side of bullishness, beginning with sales plans that call for annual growth of 5.7 percent to reach its goal of $14.5 billion in revenues, from $12.26 billion last year, and on which its profitability goals are based.

“It has only managed to achieve this [sales growth] once, in 2005-2006, when consumers went on a debt-fueled spending binge,” Tuhy wrote.

Moody’s believes…

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