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4-Traders Homepage  >  Equities  >  Nyse  >  J C Penney Company Inc    JCP

J C PENNEY COMPANY INC (JCP)
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J.C. Penney shares jump on holiday outlook, surprise sales rise

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11/10/2017 | 05:05pm CEST
The entrance of a J.C. Penney store is pictured in Arcadia

(Reuters) - J.C. Penney Co Inc (>> J C Penney Company Inc) shares surged more than 19 percent on Friday after the retailer reported much better-than-expected same-store sales and said it will compete fiercely on price while keeping inventory lean during the crucial holiday quarter.

(Reuters) - J.C. Penney Co Inc (>> J C Penney Company Inc) shares surged more than 19 percent on Friday after the retailer reported much better-than-expected same-store sales and said it will compete fiercely on price while keeping inventory lean during the crucial holiday quarter.

U.S. department stores have worked hard this year to rein in inventory and build better delivery services. They have also cut prices to boost declining foot traffic as shoppers turn to discount and online retailers.

"You're going to see in our new holiday campaign a huge emphasis on value and price," J.C. Penney Chief Executive Marvin Ellison said on a call to discuss earnings, noting that where the retailer did not have a centralized pricing strategy just over a year ago, it would now be aggressive on pricing online and in stores.

Ellison said the company had zeroed in on promotional strategies expected to improve both traffic and margins, having tested them out during the third quarter.

Third-quarter same-store sales far exceeded analyst expectations and rose by more than twice what the company itself had forecast just one day before the end of the period.

Chief Financial Officer Jeffrey Davis attributed that wide difference to unexpected sales in the last few days of the quarter.

The retailer said comparable sales rose 1.7 percent, compared with the 0.6 percent to 0.8 percent it had forecast in October. Analysts on average had expected comparable sales to increase 0.7 percent, according to Thomson Reuters I/B/E/S.

J.C. Penney shares, which lost about a quarter of their value when the company made the sales forecast, were last up 15 percent in morning trading.

The company also slashed its full-year sales and profit expectations in October, saying it sold stagnant apparel inventory at heavy discounts amid an overhaul of its women's section.

Ellison said on Friday that J.C. Penney will not need to liquidate inventory again in the fourth quarter.

"We took aggressive actions to clear slow-moving inventory, primarily allowing for an improved apparel assortment heading into the holiday season," he said.

Rivals Macy's Inc (>> Macy's Inc), Kohl's Corp (>> Kohl's Corporation) and Nordstrom Inc (>> Nordstrom, Inc.) said on Thursday that they were also entering the holiday season with tight inventory.

J.C. Penney's net loss widened to $128 million, or 41 cents per share, in the quarter ended Oct. 28, from $67 million, or 22 cents per share, a year earlier, partly because of the heavy discounting.

Excluding items, the company lost 33 cents per share, less than the 40 cent to 45 cent loss it had estimated. Analysts expected a 43 cent loss.

Net sales fell about 2 percent to $2.81 billion but beat the average analyst estimate of $2.77 billion.

(Reporting by Richa Naidu in Chicago and Sruthi Ramakrishnan in Bengaluru; Editing by Steve Orlofsky and Meredith Mazzilli)

By Richa Naidu and Sruthi Ramakrishnan

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Financials ($)
Sales 2019 12 326 M
EBIT 2019 326 M
Net income 2019 3,50 M
Debt 2019 3 560 M
Yield 2019 -
P/E ratio 2019 40,71
P/E ratio 2020 14,24
EV / Sales 2019 0,35x
EV / Sales 2020 0,33x
Capitalization 748 M
Chart J C PENNEY COMPANY INC
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J C Penney Company Inc Technical Analysis Chart | JCP | US7081601061 | 4-Traders
Technical analysis trends J C PENNEY COMPANY INC
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Mean consensus HOLD
Number of Analysts 17
Average target price 3,32 $
Spread / Average Target 38%
EPS Revisions
Managers
NameTitle
Ronald W. Tysoe Chairman
Jeffrey Allan Davis Chief Financial Officer & Executive Vice President
Therace Risch Executive VP, Chief Information & Digital Officer
Robert Gerald Turner Independent Director
Leonard H. Roberts Independent Director
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