JCPenney Bucks Lackluster Retail Trend, Beats Street In Q4

J.C. Penney Co. Inc. is providing a bright spot amid dull performance across retail.

The Plano, Texas-based department store chain, posted 4.1 percent comp growth in the fourth quarter, ended Jan. 30, 2016, and surpassed Wall Street’s estimates for sales and profit.

The company reported a net loss of $131 million, or 43 cents per share, during the quarter but its adjusted figures shot past forecasts. Q4 adjusted net income grew 831 percent, to $121 million, or 39 cents per share, compared with analysts’ estimates for EPS of 23 cents.

JCPenney said it experienced a “successful” holiday season, which led to its Q4 sales growth of 2.6 percent, to $4 billion, from $3.9 billion in the comparable quarter. Those results were in line with Wall Street’s estimates.

We’re very pleased with our sales performance over the Black Friday weekend. We had strength in key holiday categories such as boots, small electrics, fine jewelry, luggage and athletic wear,” CEO Marvin Ellison said during the firm’s conference call. “In addition, all of our apparel businesses saw positive sales results despite the incredibly challenging weather conditions in the quarter. Second, Sephora continues to perform exceedingly well. Through a combination of compelling environment, great products and knowledgeable associates, our customers are receiving a truly best in class beauty experience.”

For the full-year, JCPenney reported net sales of $12.6 billion compared to $12.3 billion in 2014, a 3 percent increase. Comparable store sales rose 4.5 percent for the year. Adjusted net loss improved to $315 million, or $1.03 per share for the year. Reported net loss improved 28.5 percent year-over-year to $513 million.

In 2016, the company expects adjusted EPS to turn positive and comp sales growth in the range of 3 percent to 4 percent.

While investors were impressed with the firm’s fourth quarter and full-year performance — JCPenney’s share price was up 13 percent at press time (12 p.m. EST) — it was the company’s announcement of a “Penney Days” promotion that made headlines, and even trended across social media, Friday.

JCPenney will unveil its marketing campaign, “Penney Days,” in the spring. The promotion will make select items from the company’s assortment of private brands available for a penny.

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