J.C. Penney Shares Surge on a Profit Forecast Hike
Bloomberg-- J.C. Penney Co. posted same-store sales results that weren’t as bad as analysts had expected, though the decline indicated the department store chain’s turnaround strategy has a way to go.
- Same-store sales, a closely watched metric in retail, fell seven per cent in the fourth quarter. That’s compared with a drop of 7.5 per cent, the average of analysts’ compiled by Consensus Metrix. See more results here.
- J.C. Penney Chief Executive Officer Jill Soltau said she was “encouraged” by the company’s progress especially in the women’s apparel business, this quarter, which spanned the holiday season.
- In January, J.C. Penney, alongside several of its department store peers, reported a drop in same-store sales for the holiday period. It posted a 5.6 per cent drop in adjusted comparable sales for the year, which exclude major appliances and in-store furniture categories. This was in line with its forecast last month of a decline of five to six per cent.
- The company said its full-year fiscal 2020 guidance does not include potential affects of the coronavirus outbreak -- investors waiting to hear more can tune into the call at 8:30 a.m.
- Soltau has spent her 16-month tenure focused on building up her executive team, improving inventory management and trying to increase foot traffic in the stores. Still, analysts have called for fewer stores for the brand. J.C. Penney said it’ll close at least six more stores in fiscal 2020.
- The shares had declined 35 per cent this year through Wednesday’s close. The retailer is at risk of delisting as it share price hovers below US$1. Last month the company was notified that it was no longer in compliance with the New York Stock Exchange continued listing criteria, at least the second time in a 12-month period.
- The company has been spending cash to invest in its turnaround and some of its creditors have pushed for a possible debt swap that could give it more time. The retailer reported liquidity of about US$1.8 billion at the end of fiscal 2019.
- The shares alternated between gains and losses on Thursday before the start of regular trading in New York.