J C Penney Company Inc (NYSE:JCP) released its latest earnings report after closing bell tonight, posting losses of 56 cents per share on $2.8 billion in net sales. Analysts had been expecting losses of 91 cents per share on $2.78 billion in revenue. In the same quarter a year ago, the department store chain posted losses of $2.66 per share and $2.66 billion in sales.
Breaking down J C Penney Company’s earnings
In tonight’s report, J C Penney reported a 6% increase in same store sales, marking the third quarter of growth in a row. The retail chain reported that online sales through jcp.com rose 16.7% year over year to $249 million.
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The company said its gross margin rose 640 basis points year over year and 290 basis points quarter over quart. EBITDA was $90 million, an improvement of $342 million year over year. Net income rose 71% year over year, while free cash flow improved $1.2 billion to $76 million in the second quarter. Selling, general and administrative expenses rose $62 million or 410 basis points year over year.
J C Penney said its Home and Fine Jewelry departments were its top-performing segments in the quarter. The Sephora store inside the chain’s department stores also continued to perform well. All of the company’s regions saw year over year sales gains, with the South and West reporting the best performance.
Inventory fell 9.7% to $2.848 billion. Operating income was a loss of $70 million, an 82% year over year improvement.
J C Penney Company provides guidance
The department store chain also offered third quarter guidance. Management projects a mid-single digit increase in comparable store sales and a gross margin that’s in line with the most recently completed quarter. J C Penney Company Inc (NYSE:JCP) expects selling, general and administrative expenses to be slightly higher than they were last year.
The company also updated its full-year guidance to reflect expectations of a mid-single digit increase in comparable store sales. J C Penney projects a significant improvement in gross margin and positive free cash flow. The retail chain expects liquidity of $2.1 billion at the end of the year and to spend about $250 million on capital expenditures.