J.C. Penney (JCP) Shares Tank After Reporting Lower 1Q Sales
Shares of the J.C. Penney Company (JCP) were trading down -0.81 or -10.38 percent to $6.99 in Friday’s premarket after the company announced lower first quarter sales and profit early this morning. J.C. Penney stock closed at $7.80, down -0.09 or -1.14 percent in Thursday’s regular trading session.
With the exclusion of some items, J.C. Penney reported an adjusted loss for the company’s first quarter of -$0.32 per share, which compares to a loss of -$0.57 for the same period one year ago. On a non-GAAP basis, the company reported a loss of -$68 million or -$0.22 per share. Net sales for the quarter came to $2.81 billion compared to $2.86 billion in 2015’s first quarter. Analysts were expecting the company to report a loss of -$0.38 per share on sales of $2.92 billion.
J.C. Penney reported comparable store sales had declined -0.4 percent in the quarter versus an increase of +3.4 percent in the same period last year. The company’s best performing divisions were Men’s, Sephora and Footwear and Handbags.
Gross margin came to 36.2 percent of sales and was impacted by additional markdown on merchandise due to unseasonable weather but was partially offset by an improvement in the company’s clearance selling margin. Expenses for the quarter declined $93 million to $872 million, or 31 percent of sales, a 280 basis point improvement over last year’s first quarter.
Marvin Ellison, J.C. Penney’s Chief Executive Officer noted in this morning’s press release that, “While our first quarter sales were below our expectations, we are maintaining our annual comp guidance of 3 % to 4 % as a result of the positive nature of our recent sales trends, the strength of our Sephora business and our decision to accelerate our appliance rollout. However, we are lowering our full year gross margin guidance to a 10 to 30 basis points increase for the year, reflecting the rollout of appliances and the rapid growth of our online business. Having said that, we remain confident that our turnaround remains on track, and we are excited about our 2016 sales drivers including new Sephora locations, Center Core enhancements and our nationwide rollout of major appliances announced earlier this week. Accordingly, we are reaffirming our $1 billion in EBITDA for 2016.”
For the full 2016 year, J.C. Penney affirmed its forecast for comparable store sales to increase +3 to +4 percent with positive adjusted earnings per share. Nevertheless, the company now expects margin to increase only 10 to 30 basis points. The company previously forecast gross margin for the year to increase 40 to 60 basis points.
Other News About JCP
JCPenney Expands Major Appliances to jcp.com and 500 Stores Nationwide
Company plans to incorporate an appliance showroom in 500 of its stores and online.
J.C. Penney celebrates 10 years of Sephora inside J.C. Penney with grand opening of 60 new locations
The new locations include a flagship opening in Salinas, California.
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