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A bad week for US department stores ended on a brighter note Friday. JC Penney continued its turnaround with an analysts-beating Q2 and also upped its outlook for the year. Its shares ended the day 5.6% higher.
So how good was the quarter? Net loss narrowed to $138m/45 cents a share, down from a loss of $172m/56 cents a year ago. Analysts had forecast a loss of 48 cents a share.
Net revenue for the quarter ended August 1 totalled $2.88bn, up from $2.80bn a year ago, and above the $2.86bn analysts had looked for.
Same-store sales also increased 4.1%, topping analysts’ 3.89% expected gain.
Penney raised its full-year earnings guidance to around $620m from $600m previously and stood by its comp sales forecast to rise 4-5% this year.
So what went well in Q2? Menswear, Home, Beauty, via its Sephora tie-up, and Fine Jewellery were the top performers, Penney said.
All regions experienced sales growth from last year, with the best performance in the western and central regions, it added.
During his first conference call with analysts, new CEO Marvin Ellison said Penney would focus on further boosting its private brands, increasing purchase levels, and improving omni-channel marketing efforts.
“Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates,” said Ellison.
He made it clear there is a lot of work to do on the e-commerce front to get Penney back to that “world-class retailer” status.
Penney’s investments in tech will amount to 29% of its capital expense budget this year, compared to 22% historically.
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