JCPenney (JCP) Posts Narrow Q2 Loss, Comps Improve

On Friday, shares of department store JCPenney (NYSE:JCP) are continually rising, up almost 3% in morning trading after the company reported a narrower-than-expected loss in its fiscal 2016 second quarter.

JCPenney reported an adjusted loss of five cents per share, beating the Zacks Consensus Estimate of a loss of fifteen cents per share and increasing 87.8% year-over-year. Total revenues came in at $2.918 billion, falling just behind our consensus estimate of $2.933 billion but rising 1.5% year-over-year.

The company posted a 52% improvement in net loss over the prior year to $(56) million.

Comparable sales increased 2.2% for the quarter. Sephora, Home, and Footwear & Handbags were JCPenney’s top performing divisions, while the Ohio Valley and Pacific were the retailers best performing geographic regions of the country.

EBITDA improved $85 million to $229 million in the second quarter, a 59% improvement in comparison to the same period last year. Gross margin was 37.1% of sales, a 10 basis point improvement from the prior year period.

"We are pleased with the sequential improvement we achieved throughout the second quarter, and our solid performance across all key metrics is encouraging,” said chairman and CEO Marvin R. Ellison. “We are excited about the initiatives we have in place to drive incremental growth in the back half of the year with our appliance rollouts, new Sephora locations, center core refreshes, in-store .com fulfillment and our chain wide rollout of buy online, pick up in store same day.”

As a result, JCPenney reaffirmed its 2016 full-year guidance. Comps are now expected to increase 3% to 4%, while adjusted earnings per share are expected to be positive. EBITDA is projected to be $1 billion, and gross margin should increase 10 to 30 basis points.

JCPenney is the latest retailer to post better-than-expected earnings results. Macy’s (NYSE:M) , Kohl’s (NYSE:KSS) , and Nordstrom (NYSE:JWN) reported their results earlier in the week, showing enough improvement and initiative year-over-year to reassure investors and send their stocks soaring.

Next week, be on the lookout for Home Depot (NYSE:HD) , Urban Outfitters (NASDAQ:URBN) , Target (NYSE:TGT) , Walmart (NYSE:WMT) , L Brands (NYSE:LB) , and Gap (NYSE:GPS) to report their quarterly earnings.

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