Although sales gained slightly in the second quarter, J.C. Penney’s loss expanded year over year, as the retailer pointed to a comp decline and the impact of a store closing initiative.
In the quarter ended July 28, the company recorded a net loss of $62 million, or 20 cents per share, versus a net loss of $56 million, or 18 cents per share, in the period a year prior. Adjusted net loss was $28 million, or nine cents per share, versus an adjusted net loss of $16 million, or five cents per share, in the year-previous period. J.C. Penney results fell short of a MarketBeat second quarter analyst average estimate of a four cent per share loss.
Comparable sales declined 1.3% in the quarter versus the 2016 period. Net sales increased 1.5% from the year-earlier period to $2.96 billion while operating income declined to $53 from $76 million.
Home, fine jewelry, footwear and handbags, Sephora and salon were the company’s top performing divisions in the quarter, J.C. Penney maintained. By region, the Southwest and Southeast performed best, the company said.
“We are pleased to deliver a top line sales increase of 1.5% and quarterly sequential improvement of 220 basis points in our comp sales performance in go forward stores,” said Marvin Ellison, J.C. Penney chairman and CEO. “While broader retail remains challenged, we are encouraged by the improved performance in our total apparel business, including a significant acceleration in kids’ apparel. Nearly all categories delivered improved sales results during the quarter, with our growth initiatives in beauty, home refresh and omnichannel continuing to deliver positive sales growth. During the second quarter, we liquidated inventory in 127 of our closing stores, which had a negative impact on gross margin and EPS. These events were isolated to the second quarter. As such, we are reaffirming our EPS guidance for the year and remain confident in our ability to further strengthen our balance sheet, while driving sustainable growth and long-term profitability for J.C. Penney. To that end, we are pleased that we are off to a strong start in August for the all-important back to school season. We are excited by this momentum and expect to deliver improved results in the back half of the year.”