J.C. Penney's same-store sales come in above its estimates
Department store chain J.C. Penney Co Inc reported an increase in third-quarter same-store sales that was twice what analysts expected, sending its shares up 15 percent in premarket trading on Friday.
The retailer said comparable sales rose 1.7 percent, compared with the 0.6 percent to 0.8 percent it had forecast last month.
Analysts on average had expected comparable sales to increase 0.7 percent, according to Thomson Reuters I/B/E/S.
J.C. Penney last month also slashed its full-year forecast as it sold stagnant apparel inventory at heavy discounts amid an overhaul of its women's section.
"We took aggressive actions to clear slow-moving inventory, primarily allowing for an improved apparel assortment heading into the holiday season," Chief Executive Marvin Ellison said in an earnings release.
U.S. department stores have worked hard this year to rein in inventory to match declining foot traffic and boost weak margins as shoppers increasingly turn to off-price and online retailers.
Rivals Macy's, Kohl's and Nordstrom reported results on Thursday and said they were entering the most important shopping season of the year in tight inventory positions.
J.C. Penney's net loss widened to $128 million, or 41 cents per share, in the quarter, ended Oct. 28, from $67 million, or 22 cents per share, a year earlier, partly because of heavy discounting to clear slow-moving inventory.
Excluding items, the company lost 33 cents per share, less than the 40 to 45-cent loss it had estimated. Analysts expected a 43-cent loss.
Net sales fell about 2 percent to $2.81 billion but beat the average analyst estimate of $2.77 billion. (Reporting by Richa Naidu in Chicago and Sruthi Ramakrishnan in Bengaluru; Editing by Sriraj Kalluvila and Steve Orlofsky)