JC Penney: That Wasn’t Good

For the past week or so, analysts have been warning that JC Penney (JCP) would have a hard time living up to expectations at its Analyst Day today. It appears they were right.

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JC Penney said same-store sales would grow at a low-single-digit clip duringthe third quarter of 2014 fiscal year, down from its previous prediction of mid-single digits after a September sales slowdown. JC Penney also said its 2015 gross margins would increase significantly over 2014 and that it would be free cash flow would be positive.

Investors weren’t happy with the news, as shares of JC Penney dropped 11% to $8.17 today. S&P Capital IQ’s Efraim Levy explains why:

JC Penney shares are lower as it cut Q3 sales outlook after disappointing September sales. Even though management reiterated that other metrics for the quarter and full year were still on plan, and provided some outlook for future growth and improved profitability, some investors may be concerned about demand and what JC Penney also admitted (albeit no surprise) is a promotional environment. Near-term “conservative” margin outlooks were below historical levels. A bright spot was in-store Sephora retailing operations that are exceeding expectations and could provide additional growth.

What did everyone expect–that JC Penney would reach its former heights in record time?

LPL Exec Resigns Over 'Employee Interactions'

LPL Financial (LPLA) says Derek Bruton, managing director and head of independent advisor services, retired Friday, after the company expressed “concerns over his interactions with other employees.”

In a statement, the independent broker-dealer added that his resignation “was not related to company performance.” It plans to fill the post “from a slate of internal leaders” and anticipates “announcing this new leader by the end of next week.”

Bruton's exit from LPL’s San Diego operations comes just two days after it opened its new headquarters in the La Jolla district of the city. The news of his resignation was made public in an SEC document.

A year ago, Bruton became LPL Financial’s representative on the Financial Services Institute’s board of directors. LPL Financial tapped him as a managing director in 2010.

Before joining the IBD in 2007, he served as a senior manager at TD Ameritrade (AMTD), Merrill Lynch (BAC) and Charles Schwab (SCHW). He played a key role in the expansion of LPL's platform for RIAs.

LPL Financial serves more than 13,600 independent financial advisors, 4,500 licensed insurance agents and some 700 financial institutions. It has a total of roughly 3,000 employees in San Diego, Boston and Charlotte.

During a call with equity analysts in February, Chairman and CEO Mark Casady explained that the independent broker-dealer is no longer pursuing any plans to form a bank holding company. It is, however, still considering the possibility of acquiring an industrial loan company.

Its stock, which fell 4% on Friday before the announcement of Bruton's exit, is up about 12% so far this year, way ahead of the major equity market indexes.