J.C. Penney Stock: Value Trap or Value Play?

J.C. Penney (NYSE: J.C.P) shares recently plunged to an all-time low after the department store chain slashed its third-quarter outlook ahead of its earnings report due on Nov. 10. The retailer now expects to report an adjusted loss of $0.40-$0.45 for the quarter, which compares poorly to its loss of $0.21 a year ago and the loss of $0.18 that analysts had expected.

J.C. Penney attributed that big reduction to a decision to liquidate slower-moving inventory, especially in women's apparel. That desperate move could lift its comparable-store sales by 0.6%-0.8% for the quarter, which tops expectations for 0.4% comps growth, but comes at the huge cost of margin-crushing markdowns.

Image source: J.C. Penney.

Source: Fool.com