J.C. Penney Co. Inc. (NYSE: JCP) reported first-quarter fiscal 2015 results after markets closed Wednesday. The venerable retailer reported an adjusted diluted loss per share of $0.57 and $2.86 billion in revenues. In the same period a year ago, J.C. Penney reported a loss of $1.16 on revenue of $2.8 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for a per share loss of $0.77 and $2.87 billion in revenue.

Same-store sales rose 3.4% in the quarter, compared with the first quarter of 2014. As we noted in our preview, at least one analyst was looking for an increase of 4%, and even that might have been a soft target given the low bar J.C. Penney had to jump over.

Gross margins were rose from 33.1% in the year-ago quarter to 36.4% in 2015. In the third quarter of last year, J.C. Penney reported gross margin of 36.6%. One step forward …

In its outlook statement, J.C. Penney said that same-store sales are now expected to rise 4% to 5%, up by one point at the bottom end of the range, and gross margins are forecast to rise by 100 to 150 basis points compared with 2014 full-year margins. Free cash flow for the year is expected to break even, and the company forecasts full-year EBITDA of approximately $600 million.

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The consensus second-quarter estimates call for a loss of $0.51 per share on revenues of $2.86 billion. Full-year estimates call for a per share loss of $1.51 on revenues of $12.57 billion.

The company’s CEO said:

We are pleased with the Company’s solid performance this quarter across all key metrics including sales, gross margin and EBITDA. This year we are switching gears, going on the offensive to gain back share and grow our business profitably while executing our vision to become the preferred shopping choice for Middle America.

Once again the company posted a lower-than-expected loss and once again investors are rewarding the company by lifting its stock price. As we have noted before, the company needs to close more stores, and there is nothing in the press announcement about doing that. Shares are trading nearly 30% above their book value on belief or something. Same-store sales are not growing fast enough, and what we are seeing here is a turnaround stuck in neutral, at best.

The stock closed down 1.9% on Wednesday at $8.71 and gained about 2% in the after-hours session to trade at $8.89. The stock’s 52-week range is $5.90 to $11.30. Thomson Reuters had a consensus analyst price target of around $8.40 before the results were announced.

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