JC Penney Shares Up 27% This Year

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J.C. Penney Co. Inc. (NYSE: JCP), once left for dead among a string of large retailers that continue to shrink and fight for survival, has impressed Wall Street this year. Its share price is higher by 27% to $8.48, a dip from August, but still impressive.

J.C. Penney’s shares have outrun those of larger Wal-Mart and Amazon, which are each up 15% this year.

While J.C. Penney turned in weak numbers for September, investors still expect the critical holiday season will be strong.

When J.C. Penney posted earnings for the period that ended April 30, it promised the 2016 calendar year would be strong. CEO Marvin R. Ellison, said:

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.

In the July quarter, J.C. Penney affirmed that guidance again:

J. C. Penney Company, Inc. announced financial results for its second quarter ended July 30, 2016. Comparable sales increased 2.2 % for the second quarter, delivering a two-year stack of 6.3%. Net loss improved 52% to $(56) million versus the prior year.

Marvin R. Ellison, chairman and chief executive officer, said, “We are pleased with the sequential improvement we achieved throughout the second quarter, and our solid performance across all key metrics is encouraging. We exceeded our profitability expectations, achieving an $85 million or 59 % increase in EBITDA to $229 million for the quarter. We are continuing to win market share and improve the bottom line of our business thanks to the commitment and hard work of our over 100,000 associates.”

Most retailers would be elated to grow so fast.