=J. C. Penney (JCP) issues light prelim Q3 results, slashes FY18 outlook

J. C. Penney lowers Q3 EPS guidance

For the third quarter, the Company expects that comparable store sales will increase in the range of 0.6 % to 0.8 % and cost of goods sold, which excludes depreciation and amortization, will increase 300 to 320 basis points compared to the same period last year, impacted primarily by a greater sales penetration in major appliances and e-commerce and the decision to accelerate the liquidation of inventory.

• The Company expects third quarter adjusted earnings per share to be in the range of ($0.45) to ($0.40).
  • Consensus was for (0.17)
• Co states, "Therefore, in the third quarter, we took the necessary steps to accelerate inventory liquidation primarily across all apparel divisions, which increases available funding to invest in new and trending merchandise categories. We realize the inventory liquidation favorably impacted sales during the months of September and October; however, we expect to deliver a positive low single- digit sales comp for this period, excluding the benefit of clearance sales. Although these actions will create a short-term negative impact to cost of goods sold and earnings, long term, we firmly believe it was the right decision for the Company as we transition into the fourth quarter and fiscal 2018."