Customers shop at a Penney store in Brooklyn.
 
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J.C. Penney ’s recovery plan to restore about $2 billion in sales lost during a disastrous makeover is meeting with skepticism from analysts, who say the forecast is at odds with a slowdown in sales currently taking shape at the company’s stores.
Paul Lejuez, an analyst with Wells Fargo Securities, raised the following questions about Penney’s assumptions, unveiled Wednesday, in a note to clients:
• They expect comps to accelerate and increase +msd [mid single digits] (~5.4%) for the next 3 years, yet comps just decelerated to +lsd [Low single digits].
• They blamed much of the Q3 comp weakness on lower sales of markdown merchandise, but they aren’t planning to increase promotions, so why would the comp trajectory change?
• They target a 36.5% GM [gross margin] in 2017, but how can GM increase from current levels (35-36%) at the same time comps are +msd for three years in a row.
• Who might they be taking all of this share from? Macy's is not going to sit still and watch it happen. The environment is not getting easier.
• They have no plans to close stores, yet expect expense dollars to stay flat over the next three years as comps increase +msd each year. How will they drive that comp increase, considering traffic still has not turned positive?
• They plan to be an omni-channel winner yet capex running well below depreciation seems insufficient to get them there.
In an indication such concerns are widespread, Penney’s shares fell 6.7% on Thursday to $7.64 after falling nearly 11% on Wednesday.
Kristin Hays, Penney spokeswoman, said there were a number of measures underway that gave Penney executives confidence they would meet their goals. Penney’s sales in the current quarter are suffering from lower levels of mark down merchandise, but the comparison with last year is skewed because a year ago the retailer was clearing out a lot of the merchandise ordered under the prior management that didn’t sell.
Ms. Hays said the clearance levels will start to normalize in late October. “When you take clearance out of the equation, our regular and promotional priced items are selling at high single digits so far this quarter, giving the team confidence that business will continue to grow,” Ms. Hays said.
She added that private brand margins had historically been 4 to 5 percentage points higher than those of national brands, but in 2012 and 2013 private brand margins fell closer to the level of national brand margins. “Going forward, we expect our private brand margins to return to the historic levels,” Ms. Hays said.
Penney has been battling to regain sales since a disastrous overhaul under formerApple executive Ron Johnson turned off customers by eliminating discounts and doing away with popular in-house brands.
Mr. Johnson was replaced in 2013 by Mike Ullman, who had run Penney before Mr. Johnson came aboard. Despite restoring discounts and bringing back house brands, Mr. Ullman has had a tough time winning back sales.
Sales grew 6% in the first half of 2014, but they remain $2.2 billion below where they were at the same point in 2011, three months before Mr. Johnson took charge.
Mr. Ullman hopes to build on those gains with redesigned handbag and shoe departments as well as improvements in the intimate apparel, jewelry and accessory sections of stores.
Kimberly Greenberger, an analyst with Morgan Stanley said in a note to clients that Penney’s plan to grow same-store sales in the mid-single digit range seems “aggressive.” Aside from Michael Kors Holdings, the fast-growing handbag and accessories maker, no other specialty or department store “under our coverage plans to comp +MSD over the next three years,” Ms. Greenberger wrote.