J.C. Penney Co. Inc. (NYSE: JCP) saw its shares rally after
it reported a smaller-than-expected quarterly loss for its most recent quarter.
The 117-year-old retailer reported an adjusted loss of 30 cents per share, lower
than the average analyst estimate of a 55-cent loss. Total revenue fell to $2.5
billion, an 8.5 decline from the same quarter of last year.
The company has been coping with a persistent sales decline.
Sales at stores open for more than a year fell 9.3 percent, compared with
expectations of a 7.74 percent decline. Management is trying to turn things
around, making decisions this year to stop selling major appliances and limit
furniture offerings. The company has also worked to reduce inventory, lower ad
spend, and close underperforming stores.
The moves appear to be cheering investors. Penney’s stock rose
nearly 7.3 percent to $1.18 after the earnings announcement. The stock has
suffered badly in 2019, falling 20 percent over the past year. As recently as
Sept. 2016, the stock was valued at around $10 a share, but hit a record low of
53 cents this year.
Penney’s wants to restore its image as a mid-priced retailer
for middle-class families. Its plans for the future include new store formats that
include features like a yoga studio, a videogame lounge, and lifestyle
workshops. It also recently partnered with resale clothing company thredUP to
add second-hand women’s clothing and handbags to its stores.
Chief Executive Jill Soltau, who joined the company last
year from craft and fabrics seller Jo-Ann Stores, said the results showed
efforts to revive sales and profits are taking hold. “We are re-establishing
and rebuilding J.C. Penney to be around for the next 117 years,” Soltau said. The
company now expects adjusted earnings for the year to be more than $475
million, higher than its prior outlook of $440 million to $475 million.