J. C. Penney misses by $0.05, beats on revs; reaffirms FY18 EPS and comp guidance
- Reports Q2 (Jul) loss of $0.09 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus of ($0.04); revenues rose 1.5% year/year to $2.96 bln vs the $2.84 bln Capital IQ Consensus.
- Comparable sales declined (1.3)% vs. -1.1% estimates, resulting in a positive two-year stack of 0.9%.
- Co reaffirms guidance for FY18, sees EPS of $0.40-0.65 vs. $0.49 Capital IQ Consensus. The Company has updated its cost of goods sold guidance and reaffirmed the remaining 2017 full year guidance. Comparable store sales: expected to be -1 % to +1 %; COGS +30-50 bps.
- "We are pleased to deliver a top line sales increase of 1.5 % and quarterly sequential improvement of 220 basis points in our comp sales performance in go forward stores. While broader retail remains challenged, we are encouraged by the improved performance in our total apparel business, including a significant acceleration in kids' apparel. Nearly all categories delivered improved sales results during the quarter, with our growth initiatives in beauty, home refresh and omnichannel continuing to deliver positive sales growth." Ellison continued, "During the second quarter, we liquidated inventory in 127 of our closing stores which had a negative impact on gross margin and EPS. These events were isolated to the second quarter. As such, we are reaffirming our EPS guidance for the year, and remain confident in our ability to further strengthen our balance sheet, while driving sustainable growth and long-term profitability for JCPenney. To that end, we are pleased that we are off to a strong start in August for the all-important back to school season. We are excited by this momentum and expect to deliver improved results in the back half of the year."
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