J.C. Penney Loss Narrows

(RTTNews) - J.C. Penney (JCP) Thursday reported a loss for the second quarter that narrowed from a year ago, on continued sales growth and sturdy margins, in what is seen as respite for the struggling department chain.

Loss for the second quarter was smaller than Wall Street estimates and revenues were in line with expectations. Investors cheered the results, with Penny shares up 8 percent in after-hours trade on the New York Stock Exchange.

The quarter saw demand for apparel and jewelry, Penny said, with growth in same-store sales, as CEO Mike Ullman goes the whole hog to revive the chain that saw its fortunes slide under then head, Ron Johnson.

Ullman said: "Our turnaround initiatives continue to produce improved financial results...we gained additional market share while significantly increasing gross margin in a highly competitive environment."

The results come as retailers face intense rivalry, and resort to price cuts and spend on promotions. On Wednesday, department store chain Macy's Inc (M) reported a 4 percent increase in quarterly profit, but missed expectations, and it cut its same-store revenue guidance for the full year.

J.C. Penney, based in Plano, Texas, posted second- quarter net loss of $172 million or $0.56 per share, compared with a loss of $586 million or $2.66 per share last year.

The quarter included gains from joint venture, while the prior year had debt and restructuring charges as well as gains from asset sale.

Excluding the above items, adjusted loss for the quarter was $0.75 per share, compared with $2.16 per share a year ago.

On average, 17 analysts polled by Thomson Reuters expected of $0.93 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter rose to $2.80 billion from $2.66 billion last year. Twenty-three analysts had a consensus sales estimate of $2.79 billion for the quarter.

Same store sales climbed 6 percent for the quarter, a growth for the third consecutive quarter.

Online sales jumped 16.7 percent.

Gross margin surged 640 basis points from last year to 36 percent, and operating expenses declined 8.8 percent.

J.C. Penney has been on a path of restructuring since Mike Ullman took over reins after the forced exit of Ron Johnson, who failed in his attempts to boost sales by pulling out coupons and discounts.

J.C. Penney projects its third-quarter same store sales to increase in mid-single digits, and gross margin to be in line with the sequential quarter.

The company still expects fiscal 2014 sames-store sales growth of mid-single digits and strong increase in gross margin.

J.C. Penney stock closed Thursday at $9.74, up $0.39 or 4.17 %, on a volume of 37.7 million shares. In after hours, the stock gained $0.80 or 8.21% at $10.54. In the past year, the stock has traded in the range of $4.90 - $14.65.