Shares for J.C. Penney Co. Inc. are soaring today — up nearly 15 percent to $3.16 as of 11:45 a.m. ET — after the firm posted a surprising same-store-sales gain of 1.7 percent in the third quarter. (At market open, the stock jumped 34 percent.)
The department store, which has struggled to meet its targets due to industrywide challenges as well as company-specific shortcomings, said today that its growth strategies and new apparel initiatives yielded a sequential comp sales improvement in nearly all merchandise categories.
Overall, total revenues declined 1.8 percent to $2.8 billion, besting analysts’ forecasts for revenues of $2.7 billion.
But the firm widened its net loss to $128 million, or 41 cents per share, from $67 million, or 22 cents per share in the comparable period. On an adjusted basis, net losses were $102 million, or 33 cents per share — which was worse than analysts’ predictions for a net loss of 17 cents per share.
Chairman and CEO Marvin Ellison said JCPenney’s “aggressive actions to clear slow-moving inventory” to allow for an “improved apparel assortment heading in to the holiday season” drove down profitability in the third quarter.
“[But] we firmly believe it was the right decision for the company as we transition into the fourth quarter and fiscal 2018,” he added. ” While we have more work to do, we remain focused on two critical factors — to operate the business for growth and deliver positive earnings.”
Looking ahead, the company expects same-store sales in the range of down 1 percent to flat and adjusted earnings per share of 2 cents to 8 cents. (JCPenney announced in October that it was slashing its outlook to the preceding numbers.)