Shares of J.C. Penney Co. Inc. fell to a 52-week low after investors realized that the early update on comparable-store sales perhaps wasn’t so positive after all.

This story first appeared in the February 5, 2014 issue of WWD. Subscribe Today.

Penney’s said Tuesday that it recorded a 2 percent comps gain for the fourth quarter, the first time since the second quarter of 2011 that the retailer has posted a positive quarterly sales result. It noted that for the nine weeks of November and December, the comps growth was a gain of 3.1 percent.

According to Sterne Agee analyst Charles Grom, those numbers and “historical monthly sales patterns suggest to us that December was likely down 1 percent and January was down 3.5 percent.”

Shares of Penney’s closed down 10.6 percent to $5.08, but at one point in intraday trading hit a new 52-week low of $4.90. Over 111.6 million shares traded Tuesday, compared with a three-month average volume of nearly 32 million shares.

The retailer also said fourth-quarter e-commerce sales at grew 26.3 percent over last year. While the e-commerce site was in existence in the 2012 holiday selling season, it wasn’t the focus of the former management team as it tried to institute a new store concept.

Myron “Mike” Ullman 3rd returned as chief executive officer of Penney’s in April.

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Penney’s also said that it closed fiscal year 2013 with “total available liquidity in excess of $2 billion.”

Citigroup credit analyst Jenna Giannelli said that the liquidity was in line with prior guidance, although below Citigroup’s $2.1 billion estimate. “We currently model fiscal year 2014 capital expenditures at $300 million and a free cash flow burn of $647 million, resulting in fiscal year 2014 year-end liquidity of $1.4 billion. We model [Penney’s] liquidity dipping to just over $700 million in [the third quarter of 2014] when the retailer starts its holiday inventory build, which we caution could alert investors and vendors alike.”

Sterne Agee’s Grom believes that there is a possibility that Penney’s “could run into another liquidity situation by [third quarter of 2014]. The bottom line is that [Penney’s] sales trend need[s] to improve materially better, and quickly.”

Given the current comp trajectory, Grom’s financial model has liquidity running at very low levels into the third quarter and believes that the retailer “will likely need an external cash infusion to stay afloat.”

Ullman said, “While 2013 brought a lot of change and challenges to J.C. Penney, the steady improvements in our business show that the company’s turnaround is on track. In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter.”

The company said it saw solid performance in several categories, including beauty sales at its Sephora shops-in-shop, activewear, sweaters, outerwear, dresses, boots and men’s apparel.

It plans to report fourth-quarter and full-year results on Feb. 26, after the market closes.

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