J. C. Penney Company, Inc. is a holding company. The Company's business consists of selling merchandise and services to consumers through its department stores and its Website at jcpenney.com. Its department stores and Website generally serve the same type of customers, its Website offers virtually the same mix of merchandise as its store assortment and other categories, and its department stores generally accept returns from sales made in stores and through its Website. It fulfills online customer purchases by direct shipment to the customer from its distribution facilities and stores or from its suppliers' warehouses and by in store customer pick up. The Company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, home furnishings and appliances. In addition, its department stores provide its customers with services, such as styling salon, optical, portrait photography and custom decorating.
Business Analysis of J. C. Penney
The Retail Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how J. C. Penney compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by J. C. Penney to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of J. C. Penney with an interactive chart.
- Revenue Growth: J. C. Penney reported a revenue growth of 3.0% year-on-year during 2016. Broadline Retail Industry grew at 0.3% in the same period
- COGS share of Revenues: As a percentage of revenue, J. C. Penney spent 64.0% of its total revenues on COGS. Broadline Retail industry average (COGS share of revenue) in the same period was 74.8%
- R&D share of Revenues: J. C. Penney R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, J. C. Penney spent 29.9% of its total revenues on Sales, Marketing, and General Administration (SG&A). Broadline Retail industry average SG&A spending in the same period was 19.8%
- Inventory share of Revenues: As a percentage of revenue, J. C. Penney spent 21.6% of its total revenues on Inventories. Broadline Retail industry average Inventory spending in the same period was 11.0%
- Accounts Payable share of Revenues: As a percentage of revenue, J. C. Penney invested 18.1% of its total revenues on Accounts Payable (A/P) Broadline Retail industry average Accounts Payable investment in the same period was 8.5%
- Accounts Receivable share of Revenues: J. C. Penney Accounts Receivable share of Revenues details are not available because either company does not share the data or we do not have it
- PP&E share of Revenues: As a percentage of revenue, J. C. Penney invested 38.1% of its total revenues on Property, Plants, and Equipments (PP&E). Broadline Retail industry average PPE investment in the same period was 23.2%
- Intangibles share of Revenues: J. C. Penney Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: J. C. Penney Net Margins in the year 2016 were -4.1%. Broadline Retail industry average Net Margins in the same period were 2.7%
Sector and Industry Association of J. C. Penney
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
J. C. Penney is associated with Retail Sector and Broadline Retail Industry.
Retail sector is comprised of the following industries: Broadline Retail; Grocery Retail; Specialty Retail; Apparel Retail; Home Improvement Retail; Specialized Consumer Services. The definitions for each of the industries is as follows:
- Broadline Retail industry includes retail outlets and wholesalers offering a wide variety of products including both hard goods and soft goods.
- Grocery Retail industry includes retail stores that primarily offer non-perishable food that is packaged in cans, bottles and boxes, with some also having fresh produce, butchers, delis, and bakeries
- Specialty Retail industry includes retailers and wholesalers concentrating on a Single Class of Goods, such as electronics, books, automotive parts or closeouts. It also includes automobile dealerships, video rental stores, dollar stores, duty-free shops and automotive fuel stations not owned by oil companies.
- Apparel Retail industry consists of retailers and wholesalers specializing mainly in Clothing, Shoes, Jewelry, Sunglasses and Other accessories.
- Home Improvement Retail industry includes retailers and wholesalers concentrating on the sale of home improvement products, including Garden Equipment, Carpets, Wallpaper, Paint, Home Furniture, Blinds and Curtains, and Building materials.
- Specialized Consumer Services industry includes providers of consumer services such as Auction Houses, Day-care Centers, Dry Cleaners, Schools, Consumer Rental Companies, Veterinary Clinics, Hair Salons and providers of Funeral, Lawn-maintenance, Consumer-storage, Heating and Cooling installation and Plumbing services.
Industry Ranking of J. C. Penney
With $12.6 billion revenues, J. C. Penney ranked number 9 of all the companies in the US Broadline Retail industry. There were a total of 21 public companies in the US Broadline Retail industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Broadline Retail industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.