Earnings

JC Penney expects sales declines to continue in 2020, more store closures ahead

A woman shops for clothing at the JC Penney store in the Roosevelt Field Mall in Garden City, New York.

Saul Martinez | Bloomberg | Getty Images

J.C. Penney‘s fourth-quarter earnings topped analysts’ expectations, despite steep sales declines during the holiday season, the company said Thursday morning.

Its stock, which trades below $1, jumped more than 9% in premarket hours on the news. Shares were recently up about 1.5%.

Here’s how the company did during its fiscal fourth quarter ended Feb. 1 compared with what analysts were expecting, based on data pulled by Refinitiv:

  • Earnings per share: 13 cents, adjusted, vs. a loss of 6 cents expected
  • Revenue: $3.49 billion vs. $3.44 billion expected
  • Same-store sales: down 7% vs. a drop of 7.3% expected

CEO Jill Soltau cited improvements in Penney’s women’s apparel business, which had been a weak spot during the holidays.

Net income shrunk to $27 million, or 8 cents per share, during the fourth quarter, from $75 million, or 24 cents a share, a year ago. Excluding one-time items, Penney earned 13 cents a share, better than the loss of 6 cents per share that analysts were expecting, as reported by Refinitiv.

Total revenue fell 7.7% to $3.49 billion from $3.79 billion a year ago. Analysts were looking for revenue of $3.44 billion.

Penney is now calling for same-store sales in fiscal 2020 to be down 3.5% to down 4.5%, excluding any impact from the coronavirus outbreak.

Total same-store sales in fiscal 2019 dropped 7.7%.

The Plano, Texas-based department store chain had already released disappointing holiday sales. Same-store sales over a nine-week period that ended on Jan. 4 dropped 7.5%, Penney said last month. Penney hasn’t reported a quarterly sales gain since the 2017 holiday season.

The company has also said it expects close at least six of its department stores in 2020, compared with it shuttering 18 department stores and nine of its furniture shops in 2019.

Penney said it will share more details about its future real estate plans during an analyst day on April 7.

Penney, which has a market cap of $233.3 million, has watched its shares fall more than 40% over the past 12 months. Its stock currently trades below $1. Penney shares had closed Wednesday up 4.7%.

Read the full earnings press release here.

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