Late Thursday, JCPenney reported that it lost $172 million, or 56 cents per share, on $2.8 billion in sales in its second quarter—a 71% increase over the same quarter last year. Though still a loss, JCPenney’s figures were a major change from second quarter 2013 when the retailer lost more a half-billion dollars. The loss per share was 56 cents. This is a marked improvement over the $2.66 loss a year ago, and far stronger than analysts’ consensus estimate of a 97 cent loss.
‘Completion of Our Turnaround’
Net revenue rose 5.1% to $2.80 billion. Analysts had expected a loss of 79 cents per share on sales of $2.79 billion. Comp sales posted a 6% gain, the third consecutive quarter of comp store gains, but compares to an abysmal 11.9% same store sales decline in the second quarter of last year. The company now expects full year comp sales to increase into the mid-single digits.
Wall Street rewarded JCPenney with a 4% increase after hours.
Gross margin was 36% of sales compared to 20.9% in the same quarter last year–a 640 basis point improvement. Gross margin was positively impacted by JCPenney’s clearance sale performance. Inventory was reported at $2.89 billion, down 9.7% from the second quarter last year.
“We expect to continue driving profitable sales this back to school season,” CEO Mike Ullman said. “As we approach the completion of our turnaround, we are focused on re-establishing JC Penney as the premier shopping destination for the moderate consumer.”