J.C. Penney Loss Widens, But Stock Up 19% On Sales Growth - Update

(RTTNews) - J.C. Penney Co. Inc. (JCP) Thursday said its first-quarter loss widened from a year ago, absent the benefits from hefty tax gains recorded last year. However, the struggling department store chain's shares surged 19 percent in extended trade after it reported sales growth for the first time since 2011. Revenues for the quarter also trumped Wall Street estimates.

Plano, Texas-based J. C. Penney's first-quarter loss widened to $352 million or $1.15 per share from $348 million or $1.58 per share last year. Last year's results included a tax benefit of $199 million.

Adjusted net loss for the quarter was $353 million or $1.16 per share, as compared to last year's loss of $289 million or $1.31 per share. On average, 19 analysts polled by Thomson Reuters expected a loss of $1.25 per share for the quarter. Analysts' estimates typically exclude special items.

The department-store chain's sales for the quarter grew to $2.80 billion from $2.64 billion last year. Analysts had a consensus revenue estimate of $2.71 billion for the quarter.

Same store sales increased 6.2 percent for the quarter, a growth for the second consecutive quarter. Investors consider same store sales an important measure of sales at established stores or stores open for at least a year.

Chief Executive Myron Ullman said, "We are very pleased to report that JCPenney delivered its second consecutive quarter of comparable store sales growth, as well as continued gross margin improvement. It is clear that our efforts to re-merchandise many areas of the store and revamp our messaging to the customer are taking hold."

JC Penney has been on a path of restructuring since Mike Ullman took over reins of the struggling department chain after the company fired Ron Johnson. Johnson had failed miserably in his attempt to boost sales by pulling out coupons and discounts.

First-quarter gross margin improved to 33.1 from 30.8 percent last year.

Moving ahead, the company expects its second-quarter same store sales to increase mid-single digits and gross margin to improve sequentially. The company maintained its full-year 2014 sames store sales growth outlook of mid-single digits.

JC Penney also said it has secured a $2.35 billion credit facility, which is expected to "provide better pricing terms and to add $500 million of incremental liquidity during peak seasonal needs."

JCP closed Thursday's trading at $8.37, down $0.24 or 2.79%, on the NYSE. The stock, however, gained $1.58 or 18.88% in after-hours trade.