J.C. Penney Co. Inc. (NYSE: JCP) shares have not traded recently like those of a retailer that had a good holiday sales period. In fact, a sell-off of the stock indicates that the brief renaissance of the company’s fortunes is over.

J.C. Penny shares have dropped 32% in the past three months. Over the same period, the S&P 500 is up almost 3%. Macy’s Inc. (NYSE: M) shares have risen 11% in three months, about the same as Nordstrom Inc.’s (NYSE: JWN).

The likely cause of the drop in J.C. Penney stock is that its comparable-store sales have gone negative again. The company’s management said when third-quarter numbers were announced that comparable-store sales were the same as in the year-ago period. Revenue was $2.76 billion, compared to $2.8 billion in the in third quarter of last year. Revenue has not eroded by double digits as was the case two years ago. But J.C. Penney needs to do better than tread water. Also, management announced comparable-store sales could see as low as a 2% increase in the current quarter.

Reviewing the last quarter, CEO Myron E. (Mike) Ullman III said:

This quarter shows the progress we are making in the final phase of JCPenney’s turnaround. We continued to significantly improve the profitability of our business with gross margin expansion of 710 basis points, a $342 million improvement in EBITDA and bottom-line financial results that exceeded even our own expectations. Like most retailers, following a strong start to the back-to-school season, sales did slow in September and October as unseasonably warm weather hindered the sale of fall goods.

J.C. Penney is not in the “final phase” of a recovery. The net loss for the most recent quarter was $188 million. The company is barely recovering at all. Shares trade in a way that shows Wall Street believes J.C. Penney will barely beat its goals.

The truth about J.C. Penney is that it remains an underperforming mid-tier retailer. Management has done nothing to take customers away from competition in way that would indicate much better numbers, nor offered any sign that the company has turned a corner.

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