J.C. Penney Q3 Comps Slip

J.C. Penney narrowed its losses in the third quarter but comps slipped when compared with the period in 2015.

For the third quarter ended October 29, J.C. Penney Co. posted a net loss of $67 million, or 22 cents per share, versus a net loss of $115 million, or 38 cents per share, for the fiscal year prior. Adjusted loss per share was 21 cents versus 46 cents in the year-previous quarter. Adjusted loss per share equaled a MarketBeat-published analyst average estimate.

Comparable sales fell 0.8% versus the quarter a year earlier. Net sales were down 1.4% to $2.86 billion from the 2015 period.

In the quarter, Sephora, home, salon and fine jewelry were J.C. Penney’s best performing departments, the company maintained. The Pacific and Northwest were the top performing geographies. Among the initiatives that the retailer has launched to boost its operating performance, and to reduce its exposure to seasonal variables such as weather, J.C. Penney has been rolling out major appliances to 500 stores and expanding its core presentation in a third of the store base. In a June appearance at the Piper Jaffray Consumer Conference, Marvin Ellison, J.C. Penney chairman and CEO, also pointed out that the retailer was finishing its rollout of buy online, pick up in store same day service chain wide.

“We are pleased to see strong sales performance in the growth initiatives we discussed at our most recent analyst meeting,” said Ellison. “The results of these initiatives are reflected in a positive sales comp in the month of October, driven by over 200 basis points of comp benefit from our 500 new appliance showrooms. We view our October sales results, specifically our acceleration in the last two weeks of the month, and the benefit from appliances, as examples of what we expect for the balance of the fourth quarter. Despite experiencing softness in apparel sales, we are continuing to improve the bottom line of our business.”

Ellison added that J.C. Penney is excited, “about the initiatives we have in place to drive incremental growth during the holiday season with our increased appliance penetration, new Sephora locations, free same day pick up for online orders, a strong cadence of promotional events and our new lowest price guarantee. We are also thrilled about delivering a 200 basis point improvement in our private label credit card penetration in the third quarter, which led to our highest penetration in many years. These and other initiatives reinforce our confidence in our ability to achieve $1 billion in EBITDA for 2016.”