JCP Jefferson Buy

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE
JCP
PENNEY (J C) CO
OVERALL RATING FOR 4TH QUARTER 2014
BUY
MULTILINE RETAIL INDUSTRY
OUR EVALUATION OF JCP

PENNEY (J C) CO is showing strong Earnings Quality, Cash Flow Quality, Operating
Efficiency and Balance Sheet Quality, and Valuation suggests a lower amount of price
risk. When combined, JCP deserves a BUY rating.
FINANCIAL SONAR FOR JCP

4TH QUARTER 2014
T IO
T
AS
EARN
K
RI S
ST R
STRONG
STRONG
STRONG
STRONG
LEAST RISK
STRONG
STRONG
STRONG
STRONG
LEAST RISK
W Q U ALITY
STRONG
STRONG
WEAK
STRONG
LEAST RISK
STR O NG
OPE
R A TI N G E F FIC I EN
FLO
STRONGEST
STRONG
WEAKEST
STRONG
LEAST RISK
SH
BUY
ONG
HOLD
STR
HOLD
NG
HOLD
Q4 2014
STRO
Q3 2014
EE
Q2 2014
E SH
Q1 2014
B ALANC
EARNINGS QUALITY
CASH FLOW QUALITY
OPERATING EFFICIENCY
BALANCE SHEET
VALUATION
NG
HISTORICAL RATINGS
OVERALL RATING
ING
SQ
LIT
LE
UA
AL
UA
Although none of the dimensions improved during the last quarter the overall rating
improved.
CA
NYSE
CY
PRICE TRENDS AND VALUATION

Price (AS OF 04/02/15)
$9.10
MARKET CAP.
$2.8 BILLION
PRICE/SALES
0.2
PRICE/EARNINGS
-3.6
PRICE/EARNINGS GROWTH
NA
PRICE/CASH FLOW
-18.3
PRICE/ADJUSTED EARNINGS
-3.3
PRICE/ADJUSTED EARNINGS GROWTH
9.9
PRICE/ADJUSTED CASH FLOW
-10.2
$12
$12
52 Week High: $11.08 on 09/01/14
$10
$10
$8
$8
$6
$6
52 Week Low: $6.29 on 12/29/14
$4
$4
Average Weekly Volume
200 Million
Apr
2014
May
200 Million
Jun
2015 Jefferson Research & Management

www.jeffersonresearch.com
Jul
Aug
Sep
Oct
Nov
Dec
Jan
2015
Feb
Mar
Report prepared on April 3, 2015

Page 1 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
EARNINGS QUALITY: STRONG

Earnings quality has long been analyzed and used by investors as a measure of the fundamental quality of the company and its
future prospects. Companies may be including certain items that increase reported earnings and often the amount of cash flow
supporting the earnings may be weak. Jefferson adjusts for these kinds of items and other anomalies to produce an adjusted
earnings number that more accurately reflects ongoing business fundamentals at PENNEY (J C) CO. Reported earnings are compared
to the Jefferson adjusted earnings as a means to gauge earnings quality. Also measured is the amount of cash flow that underpins
earnings.
The earnings quality for JCP remains STRONG.
With an adjusted net income of $1.0M in the last quarter that was greater than the reported number, JCP's quality of net income
earnings is extremely high. In addition, operating cash flow increased during the last quarter to $693.0M from -$320.0M.
$ IN MILLIONS
Adjusted Net Income
Operating Cash Flow as a Percentage of Earnings

76.5%
131.0%
131.0%
101.7%
-59.0
-1,000
-2,000
Fiscal Year
2012
Q3 2014
1274.6%
Fiscal Year
2012
Q4 2014
633.0
Trailing
12 Months
-59.0
-188.0
Fiscal Year
2013
-364.0
-1,388.0
Trailing
12 Months
-1,885.0
Fiscal Year
2013
-771.0
1.0
-231.0
-796.2
-771.0
-771.0
-798.0
-1,500
-1,259.9
-1,000
-1,388.0
-500
58.8%
1,000
125.0
-188.0
$ IN MILLIONS
Reported Operating Cash Flow
-771.0
Adjusted Net Income as a Percentage of Net Income

110.2%
96.6%
96.8%
81.3%
EARNINGS VS. OPERATING CASH FLOW
125.0
NET INCOME VS. ADJUSTED NET INCOME
Q3 2014
ACCRUALS
Q4 2014
% OF SALES
Actual Accruals
Forcasted Accruals
40.0%
30.0%
20.0%
Q1 2013
Q2 2013

Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
24.6%
30.9%
NA
28.8%
NA
30.0%
NA
31.3%
28.0%
32.0%
34.4%
25.5%
28.7%
23.3%
25.0%
0.0%
23.4%
10.0%
Q4 2014

Page 2 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
CASH FLOW QUALITY: STRONG

Cash flow is considered by many investors to be the ultimate measure of company performance and more reliable than reported
earnings. The Jefferson measurement eliminates items that are not part of recurring cash flow or the result of actual operations for
PENNEY (J C) CO. These adjustments to cash flow provide a truer measure of cash flow and the resultant cash flow quality rating.
The cash flow quality rating for JCP remains STRONG The operating cash flow quality deteriorated this fiscal year with a reported
number of $239.0M and an adjusted number that was 52.3% of reported. Though this was a negative change it was not sufficient to
lower the overall cash flow quality rating.
90.7%
Trailing
12 Months
-425.0
Fiscal Year
2013
643.0
-381.0
-127.0
-13.0
693.0
-13.0
-2,000
-2,836.0
Trailing
12 Months
633.0
Fiscal Year
2013
-127.0
Fiscal Year
2012
$ IN MILLIONS
Adjusted Free Cash Flow
Adjusted Free Cash Flow as a Percentage of Free Cash Flow

97.5%
10.2%
10.2%
89.6%
-364.0
125.0
-2,000
125.0
-1,000
-1,885.0
-1,814.0
-320.0
239.0
1,000
239.0
Adjusted Operating Cash Flow as a Percentage of Operating Cash Flow

96.2%
52.3%
52.3%
87.9%
91.3%
FREE CASH FLOW
583.0
$ IN MILLIONS
Adjusted Operating Cash Flow
-2,765.0
OPERATING CASH FLOW
-4,000
Q3 2014
Fiscal Year
2012
Q4 2014
FLOW RATIO
CASH FLOW ROI
2.00
Adjusted Cash Flow ROI

20.0%
Q3 2014
Q4 2014
1.50
0.0%
1.00
-20.0%
0.50
0.00
-40.0%
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
DEBT COVERAGE
Adjusted Debt Coverage
20
-20
-40
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
Page 3 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
OPERATING EFFICIENCY: STRONG

The ability of PENNEY (J C) CO to earn a profit is in part the result of how rapidly it converts its collection of assets into revenues and
the resulting earnings and cash flow margins available. Operating Efficiency is measured by a combination of factors including:
return on invested capital (ROIC), gross margin, EBIT margin, asset turnover, equity turnover, and lastly Staff, General, and
Administrative costs as a percentage of sales (SGA).
The operating efficiency rating for JCP remains STRONG as the net margin, return on incremental investment capital, SGA costs,
and equity turnover strengthened over the last quarter, while at the same time the ROIC and gross margin weakened. the decline in
ROIC offset this, deteriorating from -8.7%to -9.9%. The lower ROIC indicates that JCP is producing less profit per dollar of capital
invested in the business.
GROSS MARGIN
EBIT MARGIN
Change from previous quarter: DOWN
37.5%
Adjusted EBIT Margin
Change from previous quarter: UP
10.0%
35.0%
0.0%
32.5%
-10.0%
30.0%
27.5%
-20.0%
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
NET MARGIN
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
SG&A AS A PERCENTAGE OF SALES
Adjusted Net Margin
10.0%
45.0%
0.0%
40.0%
-10.0%
35.0%
-20.0%
30.0%
-30.0%
25.0%
Q1 13
Q2 13
Q3 13
Q4 13

Q1 14
Q2 14
Q3 14
Q4 14
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14

Page 4 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
OPERATING EFFICIENCY: STRONG

ROIC
RETURN ON INCREMENTAL INVESTED CAPITAL
Adjusted ROIC
0.0%
200.0%
-10.0%
100.0%
-20.0%
0.0%
-30.0%
-100.0%
-40.0%
-200.0%
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
Q1 13
Q2 13
Q3 13
ASSET TURNOVER
EQUITY TURNOVER
1.20
4.00
1.15
3.75
1.10
3.50
1.05
3.25
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
1.00
3.00
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
CASH CONVERSION CYCLE

Data not available for this chart.

Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
IN DAYS

Page 5 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
BALANCE SHEET QUALITY: STRONG

The balance sheet shows the ability of PENNEY (J C) CO to pay its bills and fund future growth. It also provides clues to aggressive
accounting since reported earnings that do not generate cash flow generally end up somewhere on the balance sheet. The following
are analyzed in determining balance sheet quality: quick ratio, current ratio, cash position, accounts receivable days sales
outstanding (AR DSOs), and number of days inventory is held prior to sale to customers (Inv Days).
The balance sheet rating for JCP remains STRONG as the cash position, Inv Days, and current ratio strengthened over the last
quarter while the debt/equity and debt/assets weakened.
Even though the cash position improved from $684.0M to $1,318M,
RECEIVABLES DAYS OUT

Data not available for this chart.
INVENTORY DAYS OUT

160
140
120
100
Q1 13
CURRENT RATIO
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
QUICK RATIO
2.00
0.60
1.75
0.50
1.50
0.40
1.25
0.30
1.00
0.20
Q1 13
Q2 13
Q3 13
Q4 13

Q1 14
Q2 14
Q3 14
Q4 14
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14

Page 6 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
BALANCE SHEET QUALITY: STRONG

DEBT/EQUITY
DEBT/ASSETS
Debt/Tangible Equity
Debt/Tangible Assets
400
55
50
300
45
200
40
100
35
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
CASH
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
$ IN MILLIONS
2,000
1,500
1,000
500
Q1 13

Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14

Page 7 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
VALUATION: LEAST RISK

A favorable valuation (a LEAST RISK or LOW RISK rating) implies lower potential downward price risk that is evidenced by a
company price multiple that is lower than the corresponding sector average. The valuation rating is based on both absolute and
relative levels at PENNEY (J C) CO compared to its peers within its sector based on price to earnings (PE), price to earnings growth
(PEG), price to sales (PS), and price to cash flow (PCF).
The valuation rating for JCP remains a LEAST RISK.
PRICE/EARNINGS
RANGE
As Reported
LOW
HIGH
AVERAGE
Reported Price/Earnings
-3.60
-3.60
-3.60
Adjusted Price/Earnings
-3.30
-1.80
-2.57
10
Sector Price/Earnings
15.60
21.80
18.26
Adjusted
Multiline Retail Sector
21.8
-3.3
-3.6
0.0
-3.2
NA
0.0
-3.3
NA
0.1
-2.1
20
NA
LAST 2 YEARS
-10
Q1 2014
Q2 2014
Q3 2014
Q4 2014
PRICE/CASH FLOW
9.60
13.00
10.68
Sector Price/Cash Flow
13.0
0.43
-10.2
40.00
-18.3
-13.70
12.1
Adjusted Price/Cash Flow
25
40.0
-12.96
-25
-58.1
-2.30
10.8
-58.10

-13.7
Reported Price/Cash Flow
Adjusted
-9.7
AVERAGE
9.9
HIGH
-3.5
As Reported
LOW
-3.6
RANGE
LAST 2 YEARS
-50
-75
Q1 2014
Q2 2014
Q3 2014
Q4 2014
PRICE/EARNINGS GROWTH
As Reported
Sector Price/Earnings Growth
0.00
0.20
0.08
7.50
5.00
2.50
0.00
Q1 2014
Q2 2014
Q3 2014
0.2
2.48
9.9
9.90
NA
0.00
0.0
Adjusted Price/Earnings Growth
10.00
NA
NA
NA
NA
0.0
NA
NA
Reported Price/Earnings Growth
Adjusted
NA
AVERAGE
0.1
HIGH
NA
LOW
NA
RANGE
LAST 2 YEARS
Q4 2014
PRICE/SALES
As Reported
Reported Price/Sales
0.20
0.30
0.28
Sector Price/Sales
0.80
1.00
0.84
1.00
0.75
0.50
Q1 2014

0.8
0.3
0.8
0.00
0.3
0.25
Q2 2014
Q3 2014
1.0
AVERAGE
0.2
HIGH
0.9
LOW
0.2
RANGE
LAST 2 YEARS
Q4 2014

Page 8 of 11

NYSE
JCP
PENNEY (J C) CO
BUY

PEER VALUATION COMPARISON
TICKER
COMPANY
DDS
DILLARDS INC -CL A
SHLD
SEARS HOLDINGS CORP
BURL
BURLINGTON STORES INC
JCP
PENNEY (J C) CO
BIG
BIG LOTS INC
TUES
TUESDAY MORNING CORP
FRED
FREDS INC
MULTILINE RETAIL SECTOR
MARKET CAP.
PRICE ON
PRICE/
04/02/15 EARNINGS
PRICE/
SALES
PRICE/
CASH
FLOW
9.7
-4.0
19.1
-18.3
10.4
50.3
29.8
13.0
$5.1 B
$4.4 B
$4.4 B
$2.8 B
$2.6 B
$757.2 M
$667.1 M
$11.1 B
$137.90
$41.30
$58.20
$9.10
$47.80
$17.30
$18.10
17.7
-2.6
65.3
-3.6
24.5
575.7
-39.3
21.8
0.8
0.1
0.9
0.2
0.5
0.8
0.4
1.0
MARKET CAP.
GROSS
MARGIN
(%)
EBIT
MARGIN
(%)
NET
MARGIN
(%)
$5.1 B
$4.4 B
$4.4 B
$2.8 B
$2.6 B
$757.2 M
$667.1 M
33.8
24.4
42.6
33.8
38.9
37.2
25.9
9.3
-2.3
11.1
3.2
-0.4
8.0
-3.2
6.0
-2.0
6.3
-1.5
-0.3
7.8
-2.2
PRICE/
EARNINGS
GROWTH
VALUATION
RATING
1.4
LEAST RISK
-0.1 LEAST RISK
0.5
LOW RISK
NA LEAST RISK
NA LEAST RISK
NA MEDIUM RISK
NA
LOW RISK
0.2
PEER OPERATING COMPARISON
TICKER
COMPANY
DDS
SHLD
BURL
JCP
BIG
TUES
FRED
DILLARDS INC -CL A

SEARS HOLDINGS CORP
BURLINGTON STORES INC
PENNEY (J C) CO
BIG LOTS INC
TUESDAY MORNING CORP
FREDS INC

CASH
CONVERSION
ROIC (%) CYCLE (DAYS)
11.8
-46.4
5.4
-9.9
13.0
0.8
-3.7
OPERATING
EFFICIENCY
RATING
31.0
LOW RISK
50.0 MEDIUM RISK
NA
LOW RISK
0.0
LOW RISK
0.0 MEDIUM RISK
0.0
LOW RISK
48.0
MOST RISK

Page 9 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
DEFINITIONS
Adjusted Net Income: Adjusted Net Income is a companys
reported net income less adjustments for one-time and
non-operating items yielding a more realistic picture of a
companys ongoing earnings.
Adjusted Debt Coverage: Adjusted Debt Coverage is a measure

of a companys ability to cover its debt obligations with cash
flow it generated from continuing operations, calculated using a
companys adjusted cash flow.
Accruals Forecasted and Actual: The comparison of forecasted

and actual accruals identifies a discretionary build not
attributable to a companys sales growth, and could be a sign of
poor earnings quality. For our purposes, the forecasted accrual
component is an aggregate measurement of total accruals
(short-term balance sheet accounts) that distinguishes between
normalized and extraordinary accruals. The normalized
accruals are based on historical relationships between sales and
accruals and are dynamically adjusted over time to account for
changes in the ratio between these two variables. Normally,
short term accruals will grow as sales grow i.e., the
normalized measure. Discretionary accruals are the portion of
accruals that are in excess of the base factor and therefore
exceed the normal and are extraordinary.
Adjusted Return on Invested Capital: Adjusted ROIC assesses a

companys efficiency at allocating the capital to profitable
investments using a companys adjusted net income (see above)
yielding a measure of how well a company is using its capital to
generate returns.
Adjusted EBIT Margin: Adjusted EBIT Margin is a measure of a
companys earnings before interest and income taxes less
adjustments for one-time and non-operating items divided by a
companys sales.
Adjusted Net Margin: Adjusted Net Margin is a measure of a
companys net income less adjustments for one-time and
non-operating items divided by a companys sales.
Adjusted Operating Cash Flow: Adjusted Operating Cash Flow is

reported operating cash flow less adjustments for one-time and
non-operating items yielding a more realistic picture of a
companys ongoing cash flow from operations.
Return on Incremental Invested Capital: ROIIC measures the

relationship between incremental investment and incremental
net operating profit after tax. This provides a measure of the
returns a company is earning on recent investments rather than
all investments as measured by ROIC.
Adjusted Free Cash Flow: Adjusted Free Cash Flow is reported

operating cash flow less adjustments for one-time,
non-operating items and capital expenditures. This provides a
more realistic picture of a companys ongoing cash generation
from operations after capital investments.
Cash Conversion Cycle: The Cash Conversion Cycle measures

the number of days working capital is tied up from the date of
purchase of raw materials until the collection of cash from the
sale of the product.
Flow Ratio: The Flow Ratio is a measurement of managements

effectiveness in managing its working capital to maximize the
companys cash flows. The measure is a ratio of a companys
non-cash current assets to its non-interest bearing short-term
liabilities. These non-cash assets include items such as
accounts receivable (which are essentially interest-free loans to
customers) and inventory (which is subject to obsolescence or
spoilage). The non-interest bearing liabilities are essentially
interest-free loans to the company. A lower ratio implies tighter
cash management for a company as it has less cash tied up in
non-cash current assets and is able to utilize interest free loans
from suppliers.
Cash Flow Return on Investment: Cash Flow ROI is a measure
of a companys ability to generate operating cash flow from its
invested capital. Many analysts consider this measure preferable
to an earnings return measure such as ROE since cash flow is
considered a more reliable measure.
Debt to Tangible Equity: Debt to Tangible Equity is a ratio of a

companys debt to equity less adjustments for goodwill and
other intangible assets yielding tangible equity.
Debt to Tangible Assets: Debt to Tangible Assets is a ratio of a
companys debt to total assets less adjustments for goodwill and
other intangible assets.
Price/Adjusted Earnings: Adjusted Price/Earnings is a relative
valuation measure comparing a companys share price to its
adjusted net income.
Price/Adjusted Cash Flow: Adjusted Price/Cash Flow is a
relative valuation measure comparing a companys share price
to its adjusted cash flow.
Price/Adjusted Earnings Growth: Adjusted Price/Earnings
Growth is a relative valuation measure comparing a companys
share price to its growth in adjusted earnings.
Adjusted Cash Flow Return on Investment: Adjusted Cash Flow

ROI is a measure of the ability to generate operating cash flow
from its investment in capital calculated using a companys
adjusted cash flow.
Debt Coverage: Debt Coverage is a measure of a companys
ability to cover its debt obligations with cash flow it generated
from continuing operations.

Page 10 of 11

NYSE
JCP
PENNEY (J C) CO
BUY
ABOUT THE FINANCIAL SONAR REPORT & METHODOLOGY

The Jefferson Financial Sonar ratings system classifies companies into three categories: Buy, Hold and Sell. The Financial Sonar
rating is the result of a point scoring system derived from the five main criteria. The more negative the rating, the more likely the
overall rating will be a Sell. More positive criteria will support an Overall Rating of Buy.
Jefferson Research & Management has developed the Financial Sonar Rating System which is based upon five analytical criteria:
Earnings Quality, Cash Flow, Operating Efficiency, Balance Sheet, and Valuation. The first four criteria are rated in one of four
categories (best to worst): Strongest, Strong, Weak, Weakest. Valuation is also rated in one of four categories (best to worst): Least
Risk, Low Risk, Medium Risk, Most Risk.
ABOUT JEFFERSON RESEARCH & MANAGEMENT

Jefferson Research & Management is an independent investment research and advisory firm founded in 1989 and based in Portland,
Oregon. The firm has been providing fundamental research to institutional and individual clients for more than 20 years. Financial
Sonar ratings are based on a proprietary rating system developed by Jefferson Research & Management that measures the changes
in company fundamentals using information from financial statements.
DISCLAIMER
This report is for information purposes only for clients of Jefferson Research & Management and in no way should be interpreted as a
complete investment recommendation. This report has been prepared exclusively by Jefferson Research & Management.
Information contained in this report is obtained from sources believed to be reliable, but no guarantee is made to its accuracy and no
representation is made that it is complete, or that errors, if discovered, will be corrected.
1) Jefferson Research & Management and its staff are not involved in investment banking activities for firms covered.
2) No employee of Jefferson Research & Management is on the board of any covered company and no outsiders are members of
Jefferson Research & Managements board.
3) Jefferson Research & Management employees trading stock in rated companies are subject to trading restrictions prior to release
(once identified) and for a one day period subsequent to rating changes but do not individually or collectively own more than 1
percent of the outstanding stock of a covered company.
No part of this report can be reprinted or transmitted electronically without the prior written authorization of Jefferson Research &
Management.


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FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE

MULTILINE RETAIL INDUSTRY

OUR EVALUATION OF JCP

FINANCIAL SONAR FOR JCP

PRICE TRENDS AND VALUATION

PRICE/ADJUSTED EARNINGS GROWTH

PRICE/ADJUSTED CASH FLOW

52 Week Low: $6.29 on 12/29/14

Average Weekly Volume

2015 Jefferson Research & Management

Report prepared on April 3, 2015

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE

MULTILINE RETAIL INDUSTRY

EARNINGS QUALITY: STRONG

Operating Cash Flow as a Percentage of Earnings

Adjusted Net Income as a Percentage of Net Income

EARNINGS VS. OPERATING CASH FLOW

NET INCOME VS. ADJUSTED NET INCOME

2015 Jefferson Research & Management

Report prepared on April 3, 2015

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE

MULTILINE RETAIL INDUSTRY

CASH FLOW QUALITY: STRONG

Adjusted Free Cash Flow as a Percentage of Free Cash Flow

Adjusted Operating Cash Flow as a Percentage of Operating Cash Flow

FREE CASH FLOW

OPERATING CASH FLOW

CASH FLOW ROI

Adjusted Cash Flow ROI

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE

MULTILINE RETAIL INDUSTRY

OPERATING EFFICIENCY: STRONG

Adjusted EBIT Margin

Change from previous quarter: UP

SG&A AS A PERCENTAGE OF SALES

Adjusted Net Margin

Change from previous quarter: UP

Change from previous quarter: DOWN

2015 Jefferson Research & Management

Report prepared on April 3, 2015

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE

MULTILINE RETAIL INDUSTRY

OPERATING EFFICIENCY: STRONG

RETURN ON INCREMENTAL INVESTED CAPITAL

Change from previous quarter: DOWN

Change from previous quarter: UP

Change from previous quarter: UP

CASH CONVERSION CYCLE

2015 Jefferson Research & Management

Report prepared on April 3, 2015

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE

MULTILINE RETAIL INDUSTRY

BALANCE SHEET QUALITY: STRONG

RECEIVABLES DAYS OUT

INVENTORY DAYS OUT

Change from previous quarter: UP

2015 Jefferson Research & Management

Report prepared on April 3, 2015

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE

MULTILINE RETAIL INDUSTRY

BALANCE SHEET QUALITY: STRONG

Change from previous quarter: UP

Change from previous quarter: UP