J.C. Penney Reports A Smaller Than Expected Loss

Earns JC Penney

J.C. Penney reported a smaller-than-expected quarterly loss on Friday, helped by demand for home goods and footwear and a strong performance by the Sephora beauty products shops in its stores.

The department store operator joined Macy's and Kohl's in reporting better-than-expected results, although expectations were low for all three.

Department stores have been struggling with stiff competition from online and off-price retailers such as Amazon.com and TJX Cos.

Shoppers are also spending more on big-ticket items such as electronics and cars than on clothes, a critical category for department stores.

Penney, whose shares were down 2 percent in volatile premarket trading on Friday, said sales at stores open at least a year rose 2.2 percent. That matched the average estimate of analysts polled by research firm Consensus Metrix.

Up to Thursday's close, Penney's shares had gained 16 percent in the past month in anticipation of an upbeat quarter. The stock closed up 8.6 percent on Thursday, following results from Macy's and Kohl's.

Penney was the only major department store operator that managed to increase comparable sales in the second quarter.

The company's net loss more than halved to $56 million, or 18 cents per share, in the quarter ended July 30.

Excluding items, the company's net loss was 5 cents per share. Net sales rose 1.5 percent to $2.92 billion.

Analysts on average had expected a loss of 15 cents per share and revenue of $2.93 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty)