J.C. Penney's Blip

 | Nov 28, 2012 | 3:35 PM EST
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How important is IZOD to J.C. Penney (JCP)? From the looks of today's action -- when I simply reiterated this morning what PVH (PVH) CEO Manny Chirico said last night, that its IZOD brand is selling well at J.C. Penney -- it seems very important.

But as is often the case, the way to play IZOD is with PVH. IZOD is one of the legacy brands that have gone from being a negative when it comes to growth -- not cash flow, as it is always bountiful-- to being a positive. You have 7% growth in legacy now versus losses, and some of that is because of the push by J.C. Penney to feature IZOD as one of its key brands.

The reason I say that you should play IZOD with PVH is simple: I don't know what J.C. Penney's making on IZOD, but I do know that PVH is being paid its price no matter what. For all I know, J.C. Penney's giving the stuff away.

Still, I am watching Green Mountain Coffee Roasters (GMCR) go higher today and it reminds me that you can't stay too negative on any stock once expectations are lowered. Green Mountain's expectations had been lowered and lowered and lowered, so it was capable of bouncing when it beat the final lowered results.

J.C. Penney's in the same boat. Let's be simple about this: The news that PVH's legacy brands are selling well at J.C. Penney is better for J.C. Penney than news it is selling worse. This just might be a positive blip in a longer-term negative story, but to not even call it a blip is to not even acknowledge that Green Mountain might be doing better than people thought it would.

Sorry, I can't be that kind of stupid. That costs you money.

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