J.C. Penney Still Sees Positive Comps Sales Trends In Q3, Q4 - Update

(RTTNews) - J.C. Penney Co. Inc. (JCP), the struggling department store chain, said Friday in a filing with the regulators that it still anticipates a positive comparable store sales trends in the third quarter and throughout the fourth quarter. The company also said it currently expects to end the year with approximately $1.3 billion in overall liquidity, excluding the net proceeds from the latest share offering.

In a filing with the Securities and Exchange Commission or SEC on September 26, J.C. Penney said it is pleased with its progress thus far in turnaround efforts and the traction its initiatives are starting to achieve. Moreover, the company said it is starting to see greater predictability in its performance across many areas.

"The Company continues to be encouraged by improvements in purchase conversion both in store and on jcp.com, primarily due to being back in stock in key items and sizes the customer expects to find at jcpenney. Overall sales on jcp.com continue to trend double digits ahead of last year," J.C. Penney said in its filing.

Taking into account the net proceeds from its new offering, the company's expected year-end liquidity is anticipated to increase by the amount of such net proceeds.

On Thursday, the company said it has commenced an underwritten public offering of 84 million shares of its common stock, and it plans to use the net proceeds from the offering for general corporate purposes.

J.C. Penney is expected to raise about $1 billion from the offering, based on J.C. Penney stock's closing price of $10.42 on Thursday.

On Wednesday, J.C. Penney's stock tanked 15 percent after a report by Goldman Sachs suggested that the company's liquidity levels will likely be strained in the third quarter and initiated coverage of its stock with an underperform rating.

Media reports last week indicated that J.C. Penney was looking to raise additional funds, primarily by pledging real estate holding, to fund a turnaround after two of its largest stake holders exited their stakes recently.

In August, J.C. Penney reported a wider-than-expected quarterly loss of $586 million or $2.66 per share, hurt by hefty charges and lower sales. Net sales decreased 12 percent to $2.66 billion.

On a positive note, the retailer recently noted that the early weeks of the back-to-school shopping period were encouraging.

The company's stock closed Thursday at $10.42, up $0.30 or 2.96 percent, on a volume of 122 million shares. In pre-market activity, shares lost $0.67 or 6.43 percent and traded at $9.75.