Yet another department store has bucked the d-store lull. Today, J.C. Penney Co. Inc. pulled off a better-than-expected Q2 finish, with gains in comparable-store sales and revenues.
The Plano, Texas-based chain’s shares are surging in midday training — up more than 8 percent at press time — after the firm narrowed its net losses by 20 percent and improved its comps more than 4 percent in the quarter, which ended Aug. 1, 2015.
J.C. Penney CEO Marvin Ellison said that while he’s pleased with the firm’s improved performance, there’s still significant work to be done.
During the company’s Q2 conference call, Ellison also acknowledged that J.C. Penney is “admittedly behind the retail industry” when it comes to omnichannel. But as proof that J.C. Penney is prioritizing digital development, the CEO pointed to JCP’s recent hiring of Mike Amend, former VP of online, mobile and omnichannel for Home Depot, as VP of omnichannel, and Mike Robbins, former SVP of global supply chain for Target Corp.’s U.S. stores, as SVP of supply chain.
The company said its top-performing merchandise divisions in the quarter were men’s, home, Sephora and fine jewelry.
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Net Income: J.C. Penney said its net losses for Q2 totaled $138 million, a 20 percent decline from net losses of $172 million in last year’s comparable quarter.
EPS: Losses per diluted share were 45 cents, down from the year-ago quarter, when losses per diluted share were 56 cents.
Net Revenue: Net revenues totaled $2.9 billion, a 2.7 percent increase from the year-ago quarter, when revenues were $2.8 billion.
Hit, Miss or Beat: J.C. Penney’s performance beat market matchers’ expectations for the second quarter. Analysts polled by Yahoo Finance had predicted revenues of $2.7 billion and EPS losses of 48 cents.
Executive Insights: “We’ve done a much better job of planning our business this year, and we are confident that we will have a strong fall season. We’re also confident that we will achieve our full-year guidance of a 45 percent comparable sales growth and all of the financial components of our annual guidance.”
— CEO Ellison, on the Q2 conference call
Ellison on Sephora:
“Sephora anchors our center core growth strategy. Comparable-store sales through our Sephora inside J.C. Penny locations grew by double digits in the second quarter. We have Sephora in over half of our stores now, and it’s also available on jcp.com. I’m very pleased with this new digital expansion of our partnership, which we launched this past quarter. Sephora not only drives traffic in sales to J.C. Penny, [it is also a] point of differentiation that cannot easily be replicated in our industry.”
Ellison on omnichannel:
“Although we are admittedly behind the retail industry in our omnichannel strategy, I remain very satisfied with the progress we’re making.”
Looking Ahead: The company increased its SG&A and EBITDA guidance and reiterated its remaining 2015 full-year guidance.
Analyst Insights: “We were impressed with J.C. Penney’s results today in light of mixed results earlier this week from industry peers.” –Robert Drbul, Nomura Securities International, Inc. analyst
