A narrower-than-expected third-quarter loss and upgraded full-year outlook has pushed J. C. Penney Company Inc.’s stock in the green.
For the period ended Nov. 2, the Plano, Texas-based firm saw its adjusted net loss per share improve 37.5% to 29 cents — far better than Wall Street’s bets of a 55-cent loss. It recorded total losses of $93 million, compared with last year’s $151 million. Shares for the department store chain jumped as high as 22% in premarket trading, and as of 10:00 a.m. ET, its stock was up more than 8% to $1.20.
The report signaled hope for JCPenney, which had struggled for multiple quarters with declining sales, leadership changes and digital competition that spooked investors and pushed its stock below $1, putting it at risk of delisting from the New York Stock Exchange.
“The past quarter was an exciting and energizing time at JCPenney as we made significant progress on our efforts to return JCPenney to sustainable, profitable growth,” CEO Jill Soltau said in a statement. “We are beginning to see results — both in our numbers and how we operate as a business — from the early implementation of our plan for renewal, which is focused on driving traffic, offering compelling merchandise, providing an engaging experience, fueling growth and building a results-minded culture.”
During the quarter, the beleaguered retailer posted revenues that decreased 10.1% to $2.38 billion, while adjusted same-store sales were down 6.6%. (Analysts had expected a drop of 7.7%.) The figures excluded the impact of JCPenney’s exit from the appliances and in-store furniture businesses.
For the year, the company predicts comps to be down 7% to 8%. However, it now calls for adjusted profits upwards of $475 million, compared with previous forecasts of between $440 million and $475 million.
“Going forward, I am confident that delivering our strategy, coupled with our ongoing discipline and commitment to improving the foundational elements of our business, will return JCPenney to its rightful place in the retail industry,” added Soltau, who took the helm last October and has since made a concerted push toward a retail makeover.
In addition to closing a few dozen underperforming stores and hiring new talent at the start of the year, the company hired debt restructuring advisers in mid-July as part of its turnaround plan. It also announced a partnership with ThredUp in August, arranging for 30 of its stores to soon offer a selection of the online consignment firm’s secondhand apparel and accessories.
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