J.C. Penney Company, Inc. (NYSE:JCP) reported a smaller than expected loss, sending the stock higher by over 15% in early trading.
Lower than anticipated loss
The mass-market retailer reported a loss of $0.68 per share on $3.78 billion in revenue. Wall Street had projected $0.85 loss per share on slightly higher revenue, expected at $3.85 billion. A note of concern in the earnings statement was a one-time tax benefit as well as the gain from the sale of assets.
Sears Holdings, a direct competitor of J.C. Penney Company, Inc. (NYSE:JCP), is having difficulty attracting customers and is also reporting losses, showing a trend in the sector.
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J.C. Penney Company, Inc. (NYSE:JCP) reported an operating loss of $1.42 billion, including $215 million of restructuring and management transition charges. Same-store sales are up 2%, which is the first time sales rose since 2011. The retailer is optimistic going forward, forecasting an additional 3% to 5% rise in sales during Q1 2014.
J.C. Penney CEO maintains positive outlook
“J.C. Penney Company, Inc. (NYSE:JCP) achieved what it set out to do on a number of important fronts in 2013. We stabilized our business, both financially and operationally, and restored our process disciplines, promotions, inventory levels and focus on the customer,” said Chief Executive Officer Myron E. Ullman III in an earnings release. “As a result, we generated positive comparable store sales in the fourth quarter and ended the year with more than $2 billion in total available liquidity. These important accomplishments reflect the progress we have made in our turnaround, which remains on course heading into 2014.”
While the stock is higher on the day, J.C. Penney Company, Inc. (NYSE:JCP) stock dove nearly 75% after hitting its 52-week high of $21.76 per share on Feb. 25, 2013. Yesterday it ended the day at $5.96 per share, and today it is trading above $7 per share.
“With the most challenging and expensive parts of the turnaround behind us, we will focus on improving gross margin, managing expense and steadily growing our sales in 2014,” Ullman said. “The goal is to deliver consistently improving financial results, and to restore J.C. Penney Company, Inc. (NYSE:JCP) as a leader in American retail.”