JC Penney News: J.C. Penney Shocks Wall Street Again, Shares Pop in After-Hours

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NEW YORK (TheStreet) — J.C. Penney  reported yet another net loss, but surprised investors in multiple areas such as profit margins and cash flow guidance, sending the shares up as much as 10% in after-hours trading.J.C. Penney, which my firm Belus Capital Advisors rated a hold, reported net sales of $2.8 billion compared to the $2.7 billion Wall Street consensus in the second-quarter.  Same-store sales increased 6%, generally in line with management’s guidance calling for a "mid-single digit" percentage gain.  Macy’s announced a 4% same-store sales increase.  The loss per share tallied 56 cents, or 37 cents ahead of consensus forecasts, fueled by gross profit margin expansion and expense levels that were better than management guided the Street back in May.Read More: Walmart’s Massive Earnings Warning Underscores 2 Big ThingsThe department store retailer’s gross profit margins expanded 640 basis points year over year, stronger than management’s guidance for a "sequential improvement."  On the other hand, operating expenses as a percentage of sales fell 410 basis points year over year, also outperforming guidance for a "slight" decline relative to a year earlier.Watch More: Fun Facts You Should Tell Your Kids About Macy’sIn addition to J.C. Penney is giving reasons for investors to be encouraged by the pace of its turnaround and cash flow outlook in 2015. The company made a splash in forecasting "positive" free cash flow in 2014.  On the last earnings call, J.C. Penney outlined "breakeven" free cash flow.
We’ll have more after the earnings call going on right now.Watch More: Buffalo Wild Wings CEO Tackles the Future with InnovationAt the time of publication, the author’s firm rated J.C. Penney shares a hold.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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