Earnings: J.C. Penney Company, Inc. (JCP) And Staples, Inc. (SPLS)

staplesBy Staples Investor Relations [Public domain], via Wikimedia Commons

Today, two of America’s best-known retailers announced their earnings to considerably different trading reactions. J.C. Penney Company, Inc. (NYSE:JCP) has seen a jump in its share price despite reporting earnings and sales below Wall Street expectations, though so far in today’s trading the stock has seemingly been given “an ‘A’ for effort.” Contrarily, Staples met analysts’ expectations but is trending downwards as of this writing. Here is a quick overview of each company’s Q3 numbers.

J.C. Penney, Inc. (JCP):

The long-embattled retailer reported an adjusted loss of $1.81 per share in Q3, which failed to reach the consensus estimate for a $1.74 loss per share, but does include a $0.73 loss per share on tax valuation allowance. Revenues came in at $2.78 billion, below the consensus $2.80 billion estimate.

While failing to meet or beat expectations, the company reported a number of positives that the Street seems to be taking away from today’s call.

While the quarter saw a drop of 4.8% in same-store sales for Q3, the company believes that its increase in October same-store sales of 0.9% is indicative of a larger trend as it heads into the holiday season.

The retailer was also happy with the following:

  • Achieved positive comparable store sales in October
  • Comparable store sales and gross margin improved sequentially throughout the quarter
  • Sales on jcp.com increased 24.5% for the quarter
  • Repaid $200 million from revolving credit facility
  • Opened 30 new Sephora inside J.C. Penney Company, Inc. (NYSE:JCP) locations, bringing total to 446

As of 12PM EST, JC Penneys was trading at $9.46, up $0.75 per share for a gain of 8.6%.

Staples, Inc. (SPLS):

Staples, Inc. (NASDAQ:SPLS), the nation’s leading office supplies retailer reported earnings of $0.42 for the quarter that ended November 2, 2013. Those numbers reflected analysts’ expectations. Revenue for the quarter came it at $6.11 billion which nearly met analysts’ expectations. This number, however, did represent a year-over-year drop of roughly 4%.

Comparable store sales fell 3% over the year-ago quarter, a result of negative currency exchanges and the closure of 107 stores in North America and Europe in the past 12 months.

In the earnings call, Staples, Inc. (NASDAQ:SPLS) once again stated that it expected earnings between $1.21 and $1.25.

“We continue to face weak demand for core office supplies, but we’re driving growth online and in new categories, while aggressively managing expenses,” said CEO Ron Sargent in a statement earlier today.

Unlike J.C. Penney Company, Inc. (NYSE:JCP), Staples, Inc. (NASDAQ:SPLS) shares are trading down as of this writing. Just after 12PM its stock price was trading at $15.17 down $0.17 or 1.11%.

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About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com

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