J.C. Penney Co. Inc. may still be operating at a loss, but the retailer’s stock received a much-needed boost after it beat Wall Street estimates on some measures.
In a rare piece of good news, the embattled Plano, Tex.-based chain revealed that its net loss narrowed to $93 million, or 29 cents a share, for the quarter ended Nov. 2. This marked an improvement from a net loss of $151 million, or 48 cents a share, during the same period a year earlier.
On an adjusted basis, the net loss was $97 million, or 30 cents a share, compared to an adjusted net loss of $164 million, or 52 cents a share. Analysts polled by Factset had on average been penciling in an adjusted deficit of 56 cents.
As a result, the company updated its outlook and now expects adjusted earnings to exceed $475 million for the full year.
This helped push the 117-year-old company’s stock up 5.4 percent to $1.17 on Friday, its highest close in over two months. It was up as much as 14 percent during premarket trading. Penney’s was previously warned it could become delisted from the New York Stock Exchange if it doesn’t get its stock back over $1.
Not every financial component saw an improvement, though, and the company still has a long way to travel before it can declare itself healthy.
Net sales decreased 10.1 percent to $2.38 billion, compared with $2.65 billion during the same period a year earlier. This was lower than analysts’ expectations for $2.52 billion. Comparable-store sales fell 9.3 percent for the quarter.
Nevertheless, Jill Soltau, chief executive officer of J.C. Penney, who is in the midst of a very difficult turnaround that has the company working hard to better understand its shoppers, is confident about the future.
“We are beginning to see results — both in our numbers and how we operate as a business — from the early implementation of our Plan for Renewal, which is focused on driving traffic, offering compelling merchandise, providing an engaging experience, fueling growth and building a results-minded culture,” she said.
“Going forward, I am confident that delivering our strategy, coupled with our ongoing discipline and commitment to improving the foundational elements of our business, will return J.C. Penney to its rightful place in the retail industry,” she added.
And while some retailers are playing down expectations about the holidays, Soltau is “excited.”
“We share the industry view that the consumer continues to be in a good place right now, low unemployment, better wages. And we’ll just continue to monitor consumer confidence,” she told analysts during a conference call.
As for the future of its 846-strong store fleet, Soltau kept tight-lipped on her plans, only disclosing that she is very close to its physical fleet and “understanding what each store is contributing to the total business.”
On digital, the company is working to improve its offering, including making it easier for customers to navigate.
“We’ve also been working on just the frictionless and seamless effort to shop cross-functionally between our digital and our physical space,” added Soltau.