J.C. Penney today reported lower losses for the third quarter, but its shares fell more than 3 percent in pre-market trading as it maintained its forecast.
Penney’s said net losses for the third quarter ended Oct. 31 fell to $137 million from $188 million, equivalent to a loss per share of 47 cents, beating Wall Street estimates by 8 cents. Revenues for the quarter were $2 billion, which were 5 percent, or $20 million above the 2014 third quarter. The Plano, Texas-based retailer posted net sales of $2.9 billion compared with $2.7 billion in the third quarter of last year. Same-store sales increased 6.4 percent for the period.
Chief executive officer Marvin Ellison said the company “grew the top line and intensified our expense discipline. As we look to the fourth quarter, we’re well-positioned to compete effectively during the key holiday shopping period.”
Gross margin improved by 70 basis points on top of a 710 basis point improvement in last year’s third quarter, to 37.3 percent of sales. SG&A expenses were down $41 million to $948 million, or 32.7 percent of sales, representing a 300 basis point improvement over the 2014 third quarter. Earnings before interest, taxes, depreciation and amortization improved to $107 million in the period. On an adjusted basis, EBITDA improved to $108 million, even taking into account Penney’s recent settlement of a class-action lawsuit over alleged advertising claims.
For the full year, the company expects comps to increase 4 percent to 5 percent.