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 J.C. Penney's results, which were released several hours before they
were due on Friday morning, were a bright spot in a troubled retail
industry.
Few companies, except home improvement chains such as Home Depot Inc
<HD.N> and Lowe's Cos Inc <LOW.N>, have been able to beat Wall
Street estimates amid a pullback in spending on discretionary items.
Department store operators, including Macy's Inc Kohl's Corp
and Nordstrom Inc, have reported dismal quarterly sales, hit by
unusually warm weather in November and December that reduced
purchases of cold weather goods.
"We're encouraged by the disciplined cost management, progress with
the balance sheet, and continued comp momentum in a challenging Q4
environment," Baird Equity Research analyst Mark Altschwager wrote
in a note.
J.C. Penney said in November it would be stocking up on all-season
goods such as sheets, towels, underwear and boots in the fourth
quarter and build up its online inventory.
The company had "left sales on the table" as it went out of stock in
these basic categories following back-to-school and Black Friday in
2014, Chief Executive Marvin Ellison had said.
J.C. Penney said home Sephora beauty outlets, footwear and handbags
were its top performing divisions in the fourth quarter.
Excluding items, the company earned 39 cents per share in the
quarter ended Jan. 30, versus 4 cents in the year-ago period,
beating the average analyst estimate of 23 cents, according to
Thomson Reuters I/B/E/S.
Sales rose 2.6 percent to $4 billion, compared with analysts'
expectations of $3.99 billion.
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J.C. Penney said it expects a 3 percent to 4 percent increase in
same-store sales for 2016 and positive adjusted earnings, with a
40-60 basis points rise in gross margin compared with 2015.
The company's quarterly same-store sales rose 4.1 percent, in line
with analysts' expectations.
J.C. Penney said in early January same-store sales surged during the
holiday shopping months of November and December.
Its quarterly net loss widened to $131 million, or 43 cents per
share, from $35 million, or 11 cents per share, a year earlier, hurt
by higher pension costs.
J.C. Penney's shares, which gained 25.5 percent this year until
Thursday's close, were trading at $9.20 premarket on Friday.
(Reporting by Rishika Sadam and Sruthi Ramakrishnan in Bengaluru;
Editing by Gopakumar Warrier and Saumyadeb Chakrabarty)
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