J.C. Penney Shares Jump Again after Solid Q2 Report

jcpenney-jcp-logoEmbattled retailer J. C. Penney Company Inc (NYSE:JCP) this morning posted better-than-expected second quarter earnings results, sending its shares higher in premarket trading.

The Plano, TX-based company reported a Q2 loss of $0.05 per share, which was was much better than the $0.14 loss that analysts had forecast. Revenue rose 1.5% from last year to $2.92 billion, in-line with expectations.

Looking ahead, JCP reaffirmed its previously-announced full-year outlook for positive adjusted EPS, same-store sales growth of 3% to 4%, and a 10 to 30 basis point bump in gross margins.

Other key notes from the report included:

  • Same-store sales rose 2.2%, missing estimates for 2.5% and down from 4.1% last year.
  • Sephora, Home, and Footwear and Handbags were the Company’s top performing divisions.
  • Geographically, the Ohio Valley and Pacific were the best performing regions of the country.
  • Gross margin was 37.1 % of sales, up 10 basis points from last year.

From the press release:

Marvin R. Ellison, chairman and chief executive officer, said, “We are pleased with the sequential improvement we achieved throughout the second quarter, and our solid performance across all key metrics is encouraging. We exceeded our profitability expectations, achieving an $85 million or 59 % increase in EBITDA to $229 million for the quarter. We are continuing to win market share and improve the bottom line of our business thanks to the commitment and hard work of our over 100,000 associates.”

Ellison continued, “We are excited about the initiatives we have in place to drive incremental growth in the back half of the year with our appliance rollouts, new Sephora locations, center core refreshes, in-store .com fulfillment and our chain wide rollout of buy online, pick up in store same day. These and other initiatives reinforce our confidence in our ability to achieve $1 billion in EBITDA for 2016.”

J.C. Penney shares rose $0.35 (+3.52%) to $10.29 in premarket trading Friday. JCP has gained 49% since the start of 2016, 7x the return of the S&P 500 in the same period. Still, the stock about 88% off its all-time highs around 84 set back in 2007.

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