{"id":43361,"date":"2013-10-24T11:48:57","date_gmt":"2013-10-24T15:48:57","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=43361"},"modified":"2013-10-24T10:50:00","modified_gmt":"2013-10-24T14:50:00","slug":"j-c-penney-coach-joining-losers-retail-sector","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/10\/24\/j-c-penney-coach-joining-losers-retail-sector\/","title":{"rendered":"J. C. Penney, Coach Joining the Losers in the Retail Sector?"},"content":{"rendered":"

By George Leong, B.Comm.<\/a><\/span><\/p>\n

The retail sector<\/a> is fierce and competitive, and the reality is that in this sector, a bad move or investment strategy could set a company up for continued miscalculations down the road. Of course, Blockbuster is a classic example.<\/p>\n

However, my modern-day example of a total screw-up in the retail sector is J. C. Penney Company, Inc. (NYSE\/JCP). The company is a perfect case of continued miscalculations and just horrible decision-making that could inevitably bankrupt this century-old American retail icon, sending it in the direction of Blockbuster to settle in the retail graveyard.<\/p>\n

The chart of J. C. Penney below shows the horrific damage caused by its poor execution in the retail sector, which makes the events in Congress seem trivial in comparison.<\/p>\n

The crossing of the 50-day moving average (MA) below its 200-day MA in December 2012 (as shown by the shaded sideways oval on the chart below) was a good indication that the worst was yet to come, based on my technical analysis.<\/p>\n

Just take a look at the subsequent decline following the \u201cdeath cross\u201d on the chart, especially the major fallout from the $15.00 to the $6.00 level in just a matter of weeks.\"\"<\/p>\n

Chart courtesy of www.StockCharts.com<\/p>\n

Execution in the retail sector tends to be more critical than any other sector.<\/p>\n

Take high-end handbag maker Coach, Inc. (NYSE\/COH), for instance. The luxury brand stock has been struggling against its high-end rivals in the retail sector, but so far, it\u2019s seen a difficult run.\"\"<\/p>\n

Chart courtesy of www.StockCharts.com<\/p>\n

Coach reported a horrible fiscal first quarter, in which sales fell one percent year-over-year. The key comparable store sales plummeted 6.8% in the North American retail sector. The positive was that Coach was able to continue to expand its sales in China, with comparable store sales growing in the double digits.<\/p>\n

Going forward, the sales growth, while positive, pales in comparison to rival Michael Kors Holdings Limited (NYSE\/KORS), which I continue to believe is the \u201cBest of Breed\u201d in the luxury apparel and accessories area. The stock is up 35% since I last featured it in these pages. (Read \u201cWhy Michael Kors Outdoes Other Luxury Stocks<\/a>.\u201d)<\/p>\n

Coach is estimated to grow its fiscal 2014 sales by 4.4% and its fiscal 2015 sales by 7.2%, according to Thomson Financial. By comparison, Michael Kors is near its 52-week high and sizzling on the charts.\"\"<\/p>\n

Chart courtesy of www.StockCharts.com<\/p>\n

A maker of high-end clothing and accessories, Michael Kors has beaten earnings-per-share (EPS) estimates for the last four straight quarters. Sales in fiscal 2014 are estimated to grow at a whopping 36.9%, followed by 24.3% in fiscal 2015, according to Thomson Financial. These metrics are far superior to Coach\u2019s, and that\u2019s why Michael Kors deserves its higher market valuation in the retail sector.<\/p>\n

Coach needs to get its act together in North America, but it\u2019s not going to be easy, with Michael Kors in its path and not letting up on the accelerator.<\/p>\n

For investors, your best bet may be to consider sticking with Michael Kors in the retail sector. Only traders or contrarian investors should even consider looking at Coach.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By George Leong, B.Comm. The retail sector is fierce and competitive, and the reality is that in this sector, a bad move or investment strategy could set a company up for continued miscalculations down the road. Of course, Blockbuster is a classic example. However, my modern-day example of a total screw-up in the retail sector … <\/p>\n

Continue reading “J. C. Penney, Coach Joining the Losers in the Retail Sector?”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-43361","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/43361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=43361"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/43361\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=43361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=43361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=43361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}