Thursday, 27 February 2020

J.C. Penney reports surprise profit, same-store sales top estimates

JC. Penney Co Inc on Thursday reported a surprise adjusted profit and a smaller drop in comparable sales than anticipated for the fourth quarter, buoyed by demand for women’s apparel, sending its shares up about 3% before the bell. 

The century-old department store chain under Chief Executive Officer Jill Soltau has been shutting unprofitable stores while testing a new store model that includes a yoga studio, a videogame lounge, and lifestyle workshops to fight competition from Inc and discount retailers.
It has also partnered with resale clothing company thredUP and relaunched its a.n.a brand with new all-inclusive sizes of jeans, fits, and fabrics to appeal to younger consumers.

“I am encouraged by our progress, especially in our women’s apparel businesses,” CEO Soltau said in a statement.

However, the company said it excepts comparable sales in fiscal 2020 to fall between 3.5% and 4.5%, much lower than the Wall Street estimate of a 1.22% drop. It also expects to close at least six store locations.

Sales at stores open for more than a year fell 7% in the quarter ended Feb. 1 compared with expectations of a 7.3% slide, according to data from IBES Refinitiv.

Revenue fell 7.7% to $3.49 billion, slightly above expectations of $3.44 billion.

Net income fell to $27 million, or 8 cents per share, from $75 million, or 24 cents per share, a year earlier. On an adjusted basis, it earned 13 cents in the quarter, surpassing the estimate of a 6 cent loss.

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