When J.C. Penney Co. Inc. (NYSE: JCP) released its fiscal second-quarter financial results before the markets opened on Thursday, the retailer said that it had a net loss of $0.18 per share and $2.62 billion in revenue. That compared with a Wall Street forecast net loss of $0.31 per share on $2.69 billion in revenue, as well as the $0.38 per share net loss and revenue of $2.83 billion posted in the same period of last year.
During the latest quarter, comparable sales decreased by 9.0%. Excluding the company’s exit from major appliance and in-store furniture categories, comparable sales decreased 6.0 % for the quarter.
Cost of goods sold, which excludes depreciation and amortization, was $1.59 billion, or 63.2% of sales, compared to 66.3% of sales in the year-ago period. The decrease was primarily driven by lower permanent markdowns, improved shrink rates as a rate of net sales, improvements in both store and online selling margins and the exit from the major appliance and in-store furniture categories earlier this year.
Looking ahead to the fiscal full year, the company expects to see comparable sales declining in the range of 7.0% to 8.0%, and comparable sales excluding the impact of the exit from major appliances and in-store furniture categories declining by 5.0% to 6.0%. Consensus estimates call for a net loss of $1.04 per share and $11.58 billion in revenue for the year.
Jill Soltau, CEO of J.C. Penney, commented:
Notably this quarter, the meaningful improvement we delivered in cost of goods sold was driven by lower permanent markdowns, improved shrink results, increased store and online selling margins and the exit of major appliance and in-store furniture categories. Additionally, we reduced inventory by 12.5 % as we continue to reinstate the discipline required to improve inventory management and productivity. Delivering on our customers’ expectations relies heavily on our vendors and the portfolio of brands we offer. The ongoing dialogues and interactions we are having with our vendors are strong and positive – they are equally excited about our direction and are bringing new ideas and innovating with us.
Shares of J.C. Penney traded up nearly 5% on Thursday to $0.59, in a 52-week range of $0.53 to $2.05. The consensus price target is $0.96.