JC Penney Q2 Earnings Cheat Sheet

Investor sentiment on J C Penney Company Inc (NYSE:JCP) shares are upbeat ahead of the earnings announcement. In the last four quarters, its bottom line on a per share basis has exceeded Street expectations between 14.5 percent and 69.6 percent.

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The company will report earnings before Friday's open.

Goldman Sachs analysts see the risk of JC Penney falling short in sales while expecting margin and SG&A continue to help EBITDA. The brokerage pointed out that department stores have underperformed in May and June compared to other retail categories.

The analysts expect the retailer to slash its same-store sales outlook for the full year. However, the company expressed the confidence of meeting its $1 billion target of EBITDA in the current year with 1.5 percent same-store sales upside.

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Deutsche Bank expects JC Penney to rebound with 1.8 percent growth in same-store sales in the same quarter while Street is expecting 2.4 percent growth. Analyst Paul Trussell believes a small beat and reiteration of EBITDA targets wouldn't be enough to keep the bears quiet. He pointed out that bears have started looking at the gross profit margin assuming a fall of 50 basis points compared to his flattish estimate. The analyst expects JCP to extend its EBITDA outlook to the fiscal year 2018.

The Street is looking for a loss of $0.15 a share on revenue of $2.93 billion for the second quarter. They expect revenue to grow 1.8 percent on a year-over-year basis.

The stock was up more than 8 percent Thursday, and another 2 percent after hours following strong reports from retail peers.

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