He said it’s going to take “not only additional months but probably several quarters until we have a firm grasp on the success of the [Penney] strategy. However, there are glimmers of hope.”
And then there’s Gap, whose fourth-quarter net income dropped 40 percent, although still beating expectations, on higher costs and heavy discounting to get holiday shoppers into the store. On Thursday, Gap also announced a $1 billion share repurchase and approved a plan to raise its annual dividend to 50 cents from 45 cents.
The share repurchase and raising the dividend are part of “an ongoing effort to deliver value to shareholders,” Klinefelter said. “It clearly has not been coming in the form of comps or same store sales gains or market share gains. So they have been returning their cash flow, which they’ve managed very effectively the last few years.”
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Disclosures:
Jeff Klinefeller does not own shares of J.C. Penney or Gap. Piper Jaffray owns shares of J.C. Penney.
Disclaimer
