(Bloomberg) — J.C. Penney Co. surged as much as 23 percent — the most in five years — as the retailer announced plans to close 15 more locations and Chief Executive Officer Jill Soltau said the department-store chain “has the capacity to deliver improved results.” The company also announced a trio of new executives.
Comparable sales, closely watched measure in the retail sector, fell 6 percent in the critical fourth quarter on an unshifted basis, missing analysts’ expectations for a 4.7 percent drop, according to Consensus Metrix. The direction wasn’t a surprise: The company had already pre-reported that the Christmas period was a tough one. Profit, however, did exceed analysts’ expectations and the company predicts it will have a positive free cash flow this year.
The store closures are one of the first major moves by Soltau, who took the helm in October. She said she’d be taking a close look at the company’s network of about 860 sites, and already named three locations in January slated for the chopping block. She also hired Michelle Wlazlo, who most recently worked at Target Corp., as chief merchant. Soltau said the company “has already taken meaningful steps to drive improvement in key businesses” such as women’s apparel and jewelry. The company has also eliminated low-margin product categories, she said. Improving the retailer’s inventory mix was seen as a key challenge when Soltau came on board. The results reiterate the idea that not every retailer had the upbeat Christmas season analysts had been expecting. While Walmart Inc. had its best holiday quarter in at least a decade and Best Buy Co. delivered sales that outpaced projections, J.C. Penney’s revenues of $3.67 billion were just short of analysts’ average estimate.
The shares jumped as much as 23 percent to $1.52 on Thursday, pushing the stock’s year-to-date gain to about 44 percent. Read more here.
(Updates share trading.)
–With assistance from Eric Pfanner.
To contact the reporter on this story: Jordyn Holman in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Anne Riley Moffat at email@example.com, Jonathan Roeder
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.
J.C. Penney Co. Inc. shares were trading at $1.60 per share on Thursday afternoon, up $0.36 (+29.03%). Year-to-date, J.C. Penney Company, Inc. Holding Company (JCP - Get Rating) has gained 53.85%, versus a 11.79% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Yahoo Finance.