Fly Intel: What to watch in J.C. Penney earnings report

J.C. Penney (JCP) is scheduled to report results of its third fiscal quarter before the market open on Thursday, November 15, with a conference call scheduled for 8:30 am EDT. What to watch for: 1. EXECUTIVE CHANGES: In early November, J.C. Penney named its second interim CFO after the abrupt resignation of its permanent CFO last month. The retailer said Michael Fung will assume the interim CFO role from Jerry Murray, who will return to his previous position as senior vice president of finance. Murray was named interim CFO in September when Jeffrey Davis resigned after less than two years on the job. Previously, the retailer named Jill Soltau, the former president and CEO of Joann Stores, as CEO. Former CEO Marvin Ellison left the company in May to become CEO of Lowe's (LOW), and the CEO role at J.C. Penney had been vacant ever since. This summer, Chief Customer Officer Joe McFarland quit after less than a year to become executive vice president, stores, at Lowe's. 2. TURNAROUND EFFORTS: Analysts and investors will listen for comments from the retailer on its cost cutting moves. Last year, J.C. Penney reduced payroll, froze overtime and took other major cost cutting steps as it faced "an expense challenge." J.C. Penney management has said the company would continue to be "aggressive" on cost cutting. In August, J.C. Penney said it plans to cut $250M in inventory by 2019. 3. COMPETITIVE LANDSCAPE: Mall-based retailers, including J.C. Penney, have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M. The current promotional environment as well as tourism sales and a shift to e-commerce has been a focus for many retailers as of late. In October, Sears (SHLD) filed for bankruptcy. At the time, the company said it intends to stay in business, keeping open stores that are profitable. Morgan Stanley analyst Kimberly Greenberger noted that she believes J.C. Penney had the highest store overlap with Sears, K-Mart, and Sears Specialty Stores and said if Sears closes additional stores or engages in liquidation sales, retailers in the close trade areas could experience some short-term pressure. 4. OUTLOOK: J.C. Penney has struggled more than some of its peers, including Nordstrom (JWN) and Macy's (M), and in August, again cut its outlook for fiscal 2018 as it continued to deal with too much inventory. The company lowered its FY18 adjusted EPS view to ($1.00)-(80c) from (7c)-13c and narrowed its FY18 SSS guidance to approximately flat from previously reaffirmed guidance of flat to up 2%. The retailer forecast SSS "slightly negative" in Q3.