Many investors expected that J.C. Penney Co. Inc. (NYSE: JCP) would have poor holiday sales. After all, its trends have been far less than positive for longer than most investors can remember. Also, its recent stock trading has not been indicative of any major news brewing. It turns out that this negative expectation was just not the case — not at all. After the close of trading Tuesday, J.C. Penney gave a preliminary update on its performance for the combined nine-week November and December period.
During this period, the company reported comparable store sales growth of 3.7% over the same period last year. J.C. Penney also announced that it expects to report fourth-quarter comparable store sales at the upper end of its previous guidance range of 2% to 4%.
You can imagine what less-bad news or good news would do to the stock. Also, keep in mind that there were almost 104 million shares short in mid-December. Such a large short interest, the second largest short interest since before last summer, indicated that there were many bets against this recovery. It almost represented six days to cover at the time as well.
CEO Mike Ullman said:
Our highest priority over the last year has been to restore profitable sales growth at JC Penney. This holiday season was instrumental in that effort – and our teams delivered. I would like to thank our associates for their hard work, warrior spirit and commitment to delivering an exceptional customer experience every day.
Customers clearly responded to our combination of great merchandise and compelling promotions this holiday season. We are proud of these results, and believe the work we are doing will fuel the continued growth of our business.
Shares of J.C. Penney closed Tuesday up 1.9% at $6.56. However, in the after-hours trading shares were up over 16% at $7.65.
The stock has a consensus analyst price target of $8.28 and a 52-week trading range of $4.90 to $11.30. The company has a market cap of roughly $2 billion.