Has J.C. Penney's Ullman Turned the Ship Around?

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Aug. 14 (Bloomberg) -- JPMorgan Asset Management's Phil Camporeale, Glenmede's Jason Pride and Bloomberg's Julie Hyman comment on J.C. Penney's narrower second-quarter loss and the outlook for the retail industry. They speak with Matt Miller on "Street Smart." (Source: Bloomberg)

This conversation with jcpenney earnings?

Jcpenney coming out with earnings that predictably are relatively strong.

I say relatively because i can, very weak comparison to a year earlier.

Same-store sales up 6%, roughly in line with estimates.

And company sales overall also coming out pretty much in line with estimates.

Gross margins expanding year-over-year against very tough comparisons, so gross margin going to 36%. it was twitchy 9.6% a year earlier.

Again, a big expansion there.

The ceo saying in his statement that turnaround initiatives continue to produce improved financial results.

The company has to deliver these kinds of numbers at this point.

It does not have an option considering where it is coming from.

The company says that third-quarter gross margin will be in line with that of the second quarter, and that in the full year, we will see a significant improvement over 2013. also, the company says that comparable sales will increase in the mid single-digit range, in line with what we've seen this quarter for broke the third quarter and the entirety of the year.

I'm also going to see if we have anymore information on the cash position of the company.

Free cash flow was $76 million, which is a $1.2 billion improvement from last year because it had negative free cash flow from last year.

Cash burn continues to be a bit of a concern, but much less than it was.

It is all relative.

When you hit rock bottom, the only way you can go is up.

Clearly, mike ullman has turned the ship.

You buy into jcpenney at this point?

Are you buying any discretionary right now?

Consumer discretionary, for us, is one of our favorite sectors, investing for total return, income, discretionary, something the like from a valuation standpoint.

We knew we ended the day, it all goes back to wage inflation.

There's an underutilization of labor forces.

We didn't inflation should be stunted.

If that is the case, it's hard to really get the retails to be that excited.

I've noticed that the fed is doing everything it can to boost the economy still.

We have unemployment down to almost less than 6% now.

Consumers have a positive outlook on the jobs market, but they are not spending money yet.

What is it going to take to get the consumer to go out there and spend?

One of the things we need to realize is that consumers throughout a very difficult economic environment has actually continued to inch up their consumer spending throughout this time frame.

The consumer spending track has been higher than what you would normally expect am aware is things like capital spending and other pieces of the economy -- government spending being an obvious one that you can point out -- have been really sluggish, but the consumer attack has been positive.

It did not get hit as hard on the downside, therefore it does not have as much to recover.

A lot of people continued to kind of pull ahead their spending from future years.

Wage growth has been adamant -- so stagnant, and most consumers are mired in debt.

We're basically at the point where the next level of consumer spending is going to have to come more from income growth than it has from the borrowing side of the equation.

We really need higher wages to drive us higher, and it is probably coming.

Maybe we get some signs from

This text has been automatically generated. It may not be 100% accurate.

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