JCPenney Beats Street, Narrows Losses In Q3

jc-penney-store-front
A JCPenney storefront.
Getty Images.

J.C. Penney Co. Inc.’s share price is climbing today — up nearly 11 percent at press time — following a strong finish to the third quarter.

While market watchers have been spooked by a wave of dismal department-store earnings over the past few weeks, JCPenney narrowed its losses and improved revenues and comparable-stores sales — by 6.4 percent — in Q3.

“Although I am pleased with the hard work and execution of the team in the third quarter, we are not satisfied,” CEO Marvin Ellison said during the firm’s Q3 conference call. “We have heightened internal awareness that we can and will become a better company. We recognize that there are still opportunities to improve our assortment planning and localization, enhance our focus on expense management, fine-tune our one-to-one marketing and become a more operationally efficient retailer. And while it is evident that JCPenney took market share during this very competitive third quarter, we are intensifying our focus and we’ll relentless pursue our goal to become a world-class retailer.”

For the quarter, all merchandise divisions had positive comp-sales gains over last year, the company said, while men’s, home, footwear, handbags and Sephora were among the top-performing divisions.

By geography, all regions saw year-over-year sales growth, with the biggest drivers being the southern and western regions of the country.

JCPenney, market watchers point out, also showed similar strength in Q2.

Net Income: Net losses for the third quarter, ending Oct. 31, 2015, narrowed to $137 million, compared with net losses of $188 million in the same period last year.

EPS: Losses per diluted share were 45 cents, compared with losses per diluted share of 62 cents in the comparable quarter.

Net Revenue: Net sales totaled $2.9 billion, compared with $2.8 billion in the third quarter of 2014, a 4.8 percent improvement.

Hit, Miss or Beat: JCPenney beat market watchers’ estimates for Q3. Analysts polled by Yahoo Finance had predicted losses per diluted share of 55 cents and revenues of $2.88 billion.

Executive Insights: “The continuation of our strong sales performance this quarter demonstrates ongoing progress toward achieving the company’s long-term financial targets. We grew the top line, improved margin and intensified our expense discipline. As we look ahead to the fourth quarter, we are well-positioned to compete effectively during the key holiday shopping period thanks to the hard work and dedication of all our associates.”
— CEO Ellison in a release