Image source: J.C. Penney Company 2014 annual report.
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What: Shares of J.C. Penney Company, one of the nation's largest apparel and home furnishing retailers, are up 12% Friday afternoon, with investors apparently encouraged that the company's turnaround has taken positive steps forward.
So what: Revenue moved 3% higher to $3.99 billion during the fourth quarter, slightly ahead of analyst estimates. Better yet, the company reported a 4.1% increase in comparable-store sales, which was a pleasant departure from the dark days of just a few years ago. The bottom line was a little more complicated, but investors found the results to their liking.
On one hand, J.C. Penney lost $131 million, or $0.43 per share during the fourth quarter, which compares unfavorably to the loss of $35 million, or $0.11 per share, from a year ago. However, investors shrugged that off because much of that widening loss was a result of restructuring and pension costs. When adjusting for those, its adjusted earnings per share checked in at $0.39 per share which was in line with what analysts expected.
Now what: As the company continues to trudge along its turnaround story, which is looking brighter each quarter, it expects comparable-store sales to jump another 3% to 4% during 2016. It also forecasts an increase of 40 to 60 basis points in gross margin and for selling, general, and administrative costs to decline compared to last year.
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Management also expects its EBITDA to reach $1 billion in 2016, adjusted EPS to be positive, and free cash flow to improve compared to last year. Those are all good business factors for a company nearly left for dead a few years ago, though it still has a long way to go before its stock price recovers from its downward spiral over the years.
The article Shares of J.C. Penney Company, Inc. Fly 12% Higher After an Encouraging Quarter originally appeared on Fool.com.
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