Declining sales and weak store traffic are likely to dog J.C. Penney for years, one analyst told CNBC Thursday, with more adjustments to its business strategy seen in the near future.
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J.C.Penney's stockhas been under relentless selling pressure since it announced asteep dropin its third-quarter sales. On Tuesday, the stock fell nearly 3.5 percent, despite a strong public endorsement byactivist investor Bill Ackman.
Yet investors and analysts have strong doubts that the retailer's attempts at a turnaround will be successful. Dana Telsey, CEO of the Telsey Advisory Group, warned that efforts by Penney CEO Ron Johnson were unlikely to bear fruit for at least another two years.
"Right now you still have weak traffic. You have weak sales and you're going to have a holiday season that's promotional for them," Telsey said, adding that despite a year's worth of transformation plans being implemented, there were more changes to come.
"If we can see the momentum of same-store sales getting less negative and down 26 [percent] to down 20 to down 15, the stock will move higher," Telsey said. However, "as a company, it's going to take almost three years in order to get the brands and transformation to what [Johnson] would like to see."
In order to improve its battered outlook, Penney will need "different brands," the analyst said.
The retailer also requires "store shops that are more targeted. It's less merchandise strewn about the floor and speed to market in getting you faster goods quickly," she added.
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Disclosures:
No disclosure information was available for this analyst.
