275  7TH Ave  7th floor New York , NY 10001                                                                                                                dcullinanecpa@yahoo.com

​                                                                                                                                                                                                     Chelsea / Lower Manhattan​​

​Daniel Cullinane CPA                                   p 848-250-9587                                                                                                                                     

​J.C. Penney Co. Inc. (NYSE: JCP) trades at a multiyear low and has fallen relentlessly for the past 10 days. The company deeply injured its investors with a bleak assessment of its future. Among the things that appear inevitable of the century-old retailer is that it will need to close more of its nearly 900 stores.

An army of downgrades to J.C. Penney shares and the shock of a sell-off of the stock with heavy volume was precipitated by this announcement:

The Company has updated its 2017 full year guidance for comparable store sales, cost of goods sold, adjusted earnings per share, and free cash flow and reaffirmed its guidance for SG&A. The fiscal 2017 full year guidance has been updated as follows on October 27:

Comparable store sales: now expected to be -1 % to 0 %;
Cost of goods sold: now expected to be up 100 to 120 basis points versus 2016;
SG&A dollars: expected to be down 1 to 2 % versus 2016;
Adjusted earnings per share: now expected to be a positive $0.02 to $0.08; and
Free cash flow: now expected to be $200 million to $300 million.

Before the news, a limited number of investors believed the company was on the mend and would post an advance in same-store sales for the holidays.

J.C. Penney lists its retail operations as approximately 875 stores in the United States and Puerto Rico. For some reason, the company is not confident enough to give an actual store count. Its other operation is JCPenney.com. The company made no mention that e-commerce would soften the blow of poor results for the balance of the year. Such news would have given investors a straw to hang onto.

Any retailer with J.C. Penney’s admitted weakness has too many locations. As it skates on razor-thin margins (which are sometimes losses), some of its locations must be losing money, and in some cases a fair amount. Those locations need to disappear, as quickly as possible, for J.C. Penney to have a chance to survive. Store closings have been routine at other retailers recently. For example, Sears announced it will shutter another 63 stores in January.

J.C. Penney does face a problem when it closes stores, which is more pressure on its own finances. Some stores have leases, and workers released have to be paid severance. Neither of those things offsets the need for the obvious, however.

The only group with the data on which J.C. Penney stores are bleeding is J.C. Penney management itself. It needs to use the information. Its future is running out of daylight


​When Pandora Media Inc. (NYSE: P) reported its third-quarter financial results after the markets closed on Thursday, the company said that it had a net loss of $0.06 per share on $378.6 million in revenues. That compared with consensus estimates of a net loss of $0.08 per share and $380.57 million in revenue. The same period of last year reportedly had a net loss of $0.07 per share and revenue of $351.9 million.

During the third quarter, advertising revenue increased 1% year over year to $275.7 million.

Total paid subscribers increased to 5.19 million from 4.01 million in the same period last year, growing approximately 29% year over year. Subscription and other revenue was $84.4 million, a 50% year-over-year increase. Additionally in October, Pandora Premium surpassed 1 million paid subscribers.

Total listener hours were 5.15 billion for the third quarter of 2017, compared to 5.40 billion for the same period of the prior year. Active listeners were 73.7 million at the end of the third quarter of 2017. The active listener number excludes approximately 1.1 million active listeners from Australia and New Zealand.

Looking ahead to the fourth quarter, analysts are forecasting $0.01 in earnings per share and $412.9 million in revenue.

Roger Lynch, president and CEO of Pandora, commented:

After just a short time here at Pandora, it’s clear to me we have a tremendous opportunity to meet the full spectrum of our listeners’ and advertisers’ needs. We have significant scale, distribution and products that deliver a superior listening experience. We will leverage these strengths to become a more integral part of our listeners’ lives and reinforce our position as the definitive source for audio advertising.

Shares of Pandora closed Thursday at $7.41, with a consensus analyst price target of $11.00 and a 52-week range of $6.76 to $14.10. Following the announcement, the stock was down about 20.5% at $5.88 in early trading indications Friday.


Republicans touting the new tax-cut plan released by the House of Representatives on Nov. 2 insist it will do wonders for the middle class. A lot of people don’t believe it.

In a new Yahoo Finance poll, 31% of respondents felt their taxes would go up under the GOP tax plan, while 42% said their taxes would go down. Twenty-three percent felt they’d end up the same and 5% weren’t sure. (Numbers don’t add to 100 because of rounding.)Source: Yahoo Finance survey conducted on SurveyMonkey

Those findings suggest Republicans aren’t convincing people that their tax-cut plan will be good for the middle class, or the economy overall. House Speaker Paul Ryan says a typical family with two kids would save $1,182 in taxes per year under the plan. In our survey, however, 22% of voters in that income bracket — between $50,001 and $75,000 in annual household income — feel their taxes will go up. That’s a big messaging problem for Republicans, including President Donald Trump, who backs the House plan.Getty Images. The new tax bill unveiled by Republicans Thursday is so simple that taxpayers will be able to file using a postcard, according to GOP lawmakers.

The sweeping House plan would revamp both the corporate and individual side of the income-tax code. It would slash the corporate tax rate to 20% from 35%, to make the United States a more attractive place for global companies to do business. On the individual side, it would replace seven income brackets with five and undoubtedly lower the tax burden for some filers. But by shifting deductions around, the House plan makes it difficult for any given family to tellwhether they’d end up better off or worse off under the plan, leaving plenty of room for critics to demagogue the whole proposal.Source: Yahoo Finance survey conducted on SurveyMonkey

Not surprisingly, people with higher incomes are more likely to believe their taxes will go up. Among people with incomes below $150,000 a year, 23% think their taxes will rise under the GOP plan. Above $150,000, 36% think they’ll face a higher tax bill. In a way, that’s by design. Since the GOP plan would put new limits on the deductibility of mortgage interest and state and local taxes— deductions typically claimed by wealthier filers — it’s likely to hit higher earners harder.

Even some Trump voters feel they’d pay more under the Republican plan. Of poll respondents who voted for Trump, 19% say their taxes will go up. Of those who didn’t vote for Trump, 39% think their taxes will rise. The gap could reflect the large portion of Democrats who presumably did not vote for Trump and live in high-income states such as New York and California.

More than 8,000 people took the poll, which we ran on Nov. 2 and Nov. 3. The full results are here. If there’s good news for Republicans, it’s that voters do think their plan would make taxes easier to navigate. Forty-five percent of respondents said the plan would make their taxes simpler, while just 6% said it would make their taxes more complicated. Thirty-seven percent expect no change and 11% aren’t sure.


Starbucks Corp. (NASDAQ: SBUX) reported fiscal fourth-quarter and full-year 2017 results after markets closed Thursday. For the quarter, the coffee roasting and restaurant company posted adjusted diluted earnings per share (EPS) of $0.54 on revenues of $5.7 billion. In the same period a year ago, the company reported EPS of $0.56 on revenues of $5.71 billion. Fourth-quarter results also compare to consensus estimates for EPS of $0.55 and $5.8 billion in revenues.For the full year, Starbucks reported EPS of $1.97 and revenues of $22.39 billion, compared with fiscal year 2016 totals of $1.90 in EPS and revenues of $21.32 billion. Analysts were expecting EPS of $2.06 and revenues of $22.5 billion.

U.S. same-store sales rose 3% and U.S. average ticket rose 2% while transactions increased by 1%. China, Asia-Pacific (CAP) same-store sales rose 2% driven by a 7% increase in transactions in China.On a non-GAAP basis, EPS totaled $0.55 in the fourth quarter compared with $0.50 in the same period last year. The sale this year of the company’s Singapore operations added six cents and a tax benefit added two cents to adjusted earnings per share, while restructuring and impairment charges cost three cents as did a donation to the Starbucks Foundation. The acquisition of some Japanese assets also snipped one cent off adjusted EPS.

Company CEO Kevin Johnson said:

Food, beverage and digital innovation are bringing customers into our stores at the same time as ongoing operational improvements are enabling us to drive increased throughput – particularly in our busiest stores at peak – and deliver a further elevated Starbucks Experience to our customers.

CFO Scott Maw added:

Starbucks delivered solid top and bottom line growth – and our strongest quarterly traffic number in the U.S. since mid-2016 – despite a difficult operating environment in both the quarter and year. Continued strong growth and performance from CAP demonstrates that Starbucks now has two significant profit engines driving our global returns, our North America business and the broader CAP market.The company said it would introduce fiscal year 2018 financial targets on its conference call later this afternoon. Analysts are expecting Starbucks to post first-quarter EPS of $0.58 and revenues of $6.26 billion For the full year, analysts are looking for EPS of $2.35 and revenues of $24.75 billion.

Starbucks is also selling its Tazo tea brand to Unilever for $384 million. The company will concentrate its focus on its Teavana brand.The revenue miss and the lighter earnings disappointed investors and the announcement of a new $15 billion share buyback program over 3 years was not enough to put a smile on their faces. With valuations at today’s nosebleed levels, even a tiny miss can take shares down, as Starbucks is find out right now

Starbucks’ shares traded down about 6.1% in after-hours trading at $51.50 in a 52-week range of $50.84 to $64.87. The 12-month consensus price target on the stock was $63.98 before today’s report.