J.C. Penney (JCP) Stock Jumps as Earnings Top Estimates

J.C. Penney reported a narrower loss in its second quarter on stronger-than-expected sales as the department store chain continues to turn its business around.

The company’s net loss narrowed to $138 million, or 45 cents per share, in the second quarter ended August. 1, from $172 million, or 56 cents per share, a year earlier. Sales rose 2.7 percent to $2.88 billion, topping projections of $2.86 billion.

The company’s shares were trading at $8.30 before the bell.

Excluding items, the company reported a loss of 41 cents per share. But it still hasn’t climbed out of the hole it fell into under former CEO Ron Johnson.

Analysts on average had expected a loss of 48 cents per share and revenue of $2.86-billion, according to Thomson Reuters I/B/E/S. Comparable-store sales were also off 1.5% on an owned and licensed basis, which is a deepening of the problem seen in the first quarter.

Macy’s is more dependent on global tourists shopping at its stores than are Kohl’s and J.C. Penney, and for two quarters running now, it has blamed them in part for its continued sales misses.

Top divisions that performed well in the recent quarter were Men’s, Home, Fine Jewelry, and Sephora. Marvin Ellison, a former Home Depot Inc. executive, took the reins this month after sharing duties with Ullman since November. Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates.

For the year, Penney now expects earnings before interest, taxes, depreciation and amortization of $620 million, compared with its previous expectation of $600 million. It now projects SG&A expenses to drop $120 million, versus prior outlook of a $100 million decline.