J.C. Penney Company, Inc. (JCP) No More Part of S&P 500 Index

J.C. Penney Company, Inc. (NYSE:JCP) has been removed from the S&P 500 Index due to retailer’s declining market value. The Plano-based retailer has seen around 37% drop in its market value this year to $2.7 billion.  According to the Associated Press, stock has declined 55% during that period.

J.C. Penny’s stock will now be included on the S&P Midcap 400 Index replacing Aeropostale.  Allegion Plc will replace the retailer on the S&P 500 index. Aeropostale will be included in Small Cap 600 Index replacing Corinthian Colleges Inc.

Staggering losses

 For the third quarter, the company posted revenue of $2.78 billion, which is a decline of 5.1%, as the comparable store sales shrunk 4.8% from the corresponding quarter of the previous year. However, the figure improved 710 basis points over the second quarter’s same store sales. Ullman stated that Men’s and Women’s apparel led to increase in the sales along with the fine Jewelry section.

On an adjusted basis, loss increased four times to $489 million, or $1.81 per share compared to loss of $123 million in the year ago period. J.C. Penney is offering heavy discounts on excess inventory in order to earn profit. Gross margin shriveled to 29.5%, but sales and traffic stance improved.

For the third quarter, J.C. Penney Company, Inc. (NYSE:JCP) has cash and cash equivalents of $1.23 billion. Total available liquidity of the company is $1.71 billion compared to $5.61 billion in debt. Operating cash outflow was recorded at $737 million during the quarter and net loss was $489 million.

Turnaround in process

J.C. Penney Company, Inc. (NYSE:JCP) is undergoing a turnaround, lead by interim CEO Mike Ullman, after the company lost staggering $985 million in fiscal 2012.

For the fourth quarter, CEO Ullman is reckoning same store comps and gross margin to progress year on year. Retailer’s available liquidity is expected to enhance to $2 billion by the end of the fourth quarter.

“I don’t see any metrics that have really improved,” he said. “They need to start the turnaround process before they complete it.” He added that Penney will be left with no cash if it does not brink upon any changes next year.