J C Penney released its third quarter earnings report before opening bell this morning, posting adjusted losses of 21 cents per share, which was in line with consensus, on $2.86 billion in sales. Analysts had been expecting $2.95 billion in revenue. In last year’s third quarter, the company reported $2.9 billion in revenue and adjusted losses of 46 cents per share.
J C Penney’s losses narrow
J C Penney’s net losses were 22 cents per share or $67 million, while in last year’s third quarter, the department store chain posted losses of 38 cents per share. The company’s same store sales declined 0.8%, compared to the consensus estimate of a 2.2% year over year gain. Gross margin declined 10 basis points year over year to 37.2% of sales. EBITDA grew 26% to $172 million, while adjusted EBITDA increased 57% to $174 million.
The company’s top-performing divisions during the third quarter were Sephora, Home, Salon and Fine Jewelry. The best-performing regions were the Pacific and Northwest regions.
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“We are pleased to see strong sales performance in the growth initiatives we discussed at our most recent analyst meeting,” J C Penney Chief Executive Marvin Ellison said in a statement. “The results of these initiatives are reflected in a positive sales comp in the month of October, driven by over 200 basis points of comp benefit from our 500 new appliance showrooms. We view our October sales results – specifically our acceleration in the last two weeks of the month – and the benefit from appliances as examples of what we expect for the balance of the fourth quarter.”
J C Penney cuts comparable store sales guidance
The department store chain now expects its full-year same store sales to grow by 1% to 2% and adjusted earnings to be in the green. Previously, the company expects its comparable store sales to grow by 3% to 4% for the full year. It looks for a gross margin that’s flat with last year and about $1 billion in EBITDA for the full year.
Shares of J C Penney tanked in premarket trading this morning, falling by as much as 9.31% to $7.99.