J.C. Penney Shares Rise After Profit Beat Estimates, Store Closures Announced

J.C. Penney Co. Inc. shares rose 1.8% in Friday premarket trading after the company announced fourth-quarter earnings that beat estimates. Net income was $192.0 million, or 61 cents per share, compared with a loss of $131.0 million, or 43 cents per share, last year. Adjusted EPS was 64 cents, beating the 61-cent FactSet consensus. Sales totaled $3.96 billion, down from $4.0 billion last year and just below the $3.98 billion FactSet consensus. Same-store sales fell 0.7%, while the FactSet consensus was a 0.3% decline. J.C. Penney expects full-year 2017 same-store sales to range from a 1% decline to a 1% increase, and adjusted EPS of 40 cents to 65 cents. The FactSet consensus is for a 1.3% increase and EPS of 54 cents. The retailer also announced plans to close 130 to 140 stores and two distribution centers in the next few months. It is initiating a voluntary early retirement program for about 6,000 eligible associates. J.C. Penney expects an annual cost savings of about $200 million. The full list of store closures will be available mid-March with the closures taking place in the second quarter of 2017. J.C. Penney shares are down 11% for the past year while the S&P 500 index is up 22.5% for the same period.