J C. Penney Company Inc. (NYSE:JCP): Has Recent Earnings Growth Beaten Long-Term Trend?

Investors with a long-term horizong may find it valuable to assess J C. Penney Company Inc.'s (NYSE:JCP) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how J. C. Penney Company is currently performing. View our latest analysis for J. C. Penney Company

How Did JCP's Recent Performance Stack Up Against Its Past?

To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to analyze different companies on a more comparable basis, using new information. For J. C. Penney Company, its latest trailing-twelve-month earnings is -US$7.00M, which, in comparison to last year’s figure, has become less negative. Since these figures may be somewhat short-term, I’ve created an annualized five-year figure for JCP's earnings, which stands at -US$547.18M. This suggests that, although net income is negative, it has become less negative over the years.

We can further assess J. C. Penney Company's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade J. C. Penney Company has seen an annual decline in revenue of -4.50%, on average. This adverse movement is a driver of the company's inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the US multiline retail industry has been growing its average earnings by double-digit 17.33% over the past year, and a less exciting 6.34% over the past half a decade. This means although J. C. Penney Company is currently loss-making, it may have gained from industry tailwinds, moving earnings in the right direction.

What does this mean?

J. C. Penney Company's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues J. C. Penney Company may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research J. C. Penney Company to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for JCP’s future growth? Take a look at our free research report of analyst consensus for JCP’s outlook.
2. Financial Health: Is JCP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 05 May 2018. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.