J.C. Penney, the department store chain that has been in the midst of a turnaround as it works to undo the damage done by former CEO Ron Johnson, announced a strong holiday performance Tuesday, and the news has since sent stock rallying.
The retailer said in a statement that comparable store sales rose 3.7% for the combined nine-week November and December period, and the announcement sent its shares up 20 percent to $7.81 in after-hours trading Tuesday. As of publication time, JCP’s stock was trading at $7.89.
The positive holiday performance follows a third quarter report released in November reflecting same store sales flat to 2013, and up 4.3% for the year-to-date. Gross margin improved 710 basis points for the period and earnings before interest, tax, depreciation and amortization (EBITDA) was $102 million compared to the year before loss of 240 million.
Company chief executive officer Mike Ullman, said in Tuesday’s statement, “Our highest priority over the last year has been to restore profitable sales growth at JCPenney. This holiday season was instrumental in that effort – and our teams delivered.”
He added, “Customers clearly responded to our combination of great merchandise and compelling promotions this holiday season. We are proud of these results, and believe the work we are doing will fuel the continued growth of our business.”
JCP now expects comparable store sales for the fourth quarter to come in at the upper end of its previous 2 to 4 percent guidance range.