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JC Penney CEO: This is our comeback strategy

Is J.C. Penney back from the dead? Market watchers eyed the company as it posted strong quarterly earnings. It beat both on the top and bottom lines, improving gross profit and its adjusted EBITDA, according to analysts at Zacks Investment Research. In the past week, after reporting results, the stock soared 36 percent.

This is Penney's fourth beat in a row, according to the Zacks analysts. Still, the stock has more than halved in the past five years. Whether this turnaround is bound to stick or not, the retailer is a far cry from its position a decade ago. In the same vein, its new CEO, Marvin Ellison, told CNBC that the company is not interested in reiterating its highs.

"The focus is great shareholder value and shareholder return," he told "Power Lunch" on Monday. "We want to run a profitable company that grows sales, but grows sales in a profitable way," he said, noting that getting back to its pinnacle "would be fabulous."

The bane of brick-and-mortar businesses is the seemingly rapid growth of online retail companies. Euromonitor International reported that the Internet retailing sector had growth of 13 percent in 2015. Due to the changing environment, investors remain concerned about the stock's ability to improve.

While the online sector is booming, PricewaterhouseCoopers' Global Total Retail Survey 2016 showed that 48 percent of clothing and footwear shoppers research online, but a strong 53 percent still prefer to make purchases in store.

Despite changes in the way that consumers shop, Jan Kniffen, CEO of J Rogers Kniffen Worldwide Enterprises, told "Power Lunch" that the need for department stores may be declining, but the sector is still a beneficiary in the market.

Ellison told CNBC that about 60 more Sephoras will be coming this year. The addition of the cosmetic stores in J.C. Penney stores boosted its performance last quarter. In addition, the company will redesign its sunglasses, fashion jewelry and accessories section. While these are a few of the strategies that the executive said are incremental to last year's growth, the greater reform is in "talent."

"We went out and we recruited one of the best e-commerce executives in retail, we went out and recruited a great supply-chain executive, we just named a new chief information officer, we have a new marketing leader," he said. "The reason why we were so successful in the fourth quarter is because of the buy-in of the team to the strategy."

Kniffen, who previously advised investors to sell the stock, is now rooting for the new CEO, grading his performance an "A+." The former retail executive noted that when he visits J.C. Penney stores, employees are confident in Ellison's direction. Kniffen said "you can't buy that in retailing."

"When you've got an executive that the people in the stores really believe cares about how their job works, they work a lot harder and they work a lot smarter," he said.

Correction: An earlier version gave the wrong last name for Marvin Ellison.