J.C. Penney (JCP) finally enjoyed its first positive quarterly sales report since 2011. On February 4, the retailer announced that its same-store sales rose 2 percent for the fourth quarter.
In the nine weeks running through November and December, JCP’s same-store sales increased 3.1%. It experienced particularly brisk performance in activewear, outerwear, dresses, boots, men’s clothing, luggage and housewares.
Nevertheless, revenue for the quarter skid to $3.78 billion down from $3.88 billion a year ago. Also, JCP reported a full-year operating loss of $1.42 billion. In 2013, same-store sales were down 7.4% and overall sales dropped 9 percent.
JCP CEO Mike Ullman spoke enthusiastically of the results. “While 2013 brought a lot of change and challenges to J.C. Penney, the steady improvements in our business show that the company’s turnaround is on track. In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter.”
While there were per share losses for JCP, they were more modest than most industry forecasts. Instead of the $0.85 per share experts expected, the retailer only lost $0.68 per share. Right before JCP posted its fourth-quarter results on February 25, its shares jumped 6 percent in anticipation of optimistic news. After the results were made public, shares rose another 12.4%.
JCP’s results are especially encouraging since gloomy expectations had been generated by its newfound reticence regarding financial disclosure. In January, investors were confused by an announcement that it was “pleased” with its holiday performance. But, JCP neglected to expound upon what precisely this means, choosing not to disclose any further details. Some believe JCP is slowly backing away from its practice of releasing monthly sales reports, which often generate wild fluctuations in its share price.
There have been other signs lately that JCP is slowly regaining lost ground. According to a JCP spokesperson, the retailer increased its sales in November by 10 percent, registering a jump in same-store performance numbers for the second consecutive month. October was also touted by the company as evidence of an increasingly successful turnaround strategy; sales jumped 0.9% for October, a substantial improvement in light of the fact that September suffered a 4 percent decline. A company spokesperson said the stronger performance was largely attributable to improved inventory in central private brands as well as an overhaul of the home goods department.
JCP still has a long way to go. Last week it recorded a fifty-week low for its share price. The ailing company’s shares slid 36.9% since the conclusion of 2013. Its recent drop in share price is likely attributable to its announcement January 15 that it plans to close thirty-three stores, affecting more than 2,000 jobs. And its sluggishness is particularly worrisome since the retail industry as a whole has been surging, with the S&P 500 Retailing Industry Group recording a 1.6% increase to 890.84 on January 30. JCP, however, was down 8.3%, or $0.52. And it continues to carry a substantial debt load, pegged at approximately $5.61 billion.