J.C. Penney Posts Q4 Break Even But Misses Estimate

In the fourth quarter, J. C. Penney Co. suffered a net loss of $59 million, or 19 cents per diluted share, versus a net income of $35 million, or 11 cents per share, in the year-prior quarter, the company announced. However, adjusted net income broke even due to a $206 million gain versus last year’s fourth quarter, the retailer asserted.

Still, the break even was 14 cents short of a Zacks Consensus estimate of financial analyst expectations.

Comparable store sales advanced 4.4% in the fourth quarter.  Operating income for the period was $63 million versus a $138 million loss in last year’s fourth quarter. EBITDA was $220 million, a $197 million improvement from the same period last year, J.C. Penney reported.

Total sales were $3.89 billion versus $3.78 billion in the previous-year period, the company stated.

Men’s apparel, home and fine Jewelry were J.C. Penney’s best performing merchandise divisions during the quarter, the retailer emphasized. According to the company, Sephora inside JCPenney, now operating in 492 of the mid-tier retailers’ stores, also delivered a strong performance. Geographically, all regions enjoyed sales gains over last year’s quarter with the best performance in the central and western sections of the United States, the company related.

For the full year, J.C. Penney posted a net loss of $771 million, or $2.53 per diluted share, versus a net loss of $1.39 billion, or $5.57 per diluted share, it maintained. As with the fourth quarter, full year comps increased 4.4%. EBITDA, at $323 million, gained more than $1.1 billion from last year, the company pointed out.

Total sales were $12.26 billion versus $11.86, in the previous year, the company maintained.

Mike Ullman, III, J.C. Penney CEO, said, in announcing the financial results, “2014 was a successful year for J.C. Penney. Thanks to the hard work and outstanding execution by our teams, we significantly grew sales and gross margin and delivered on our goal to generate positive free cash flow, representing a $2.8 billion improvement over last year. I am extremely proud of all that has been accomplished to restore this great company. We are back in the eyes of our customers, back running the business effectively and back on solid financial footing.  We fully intend to build on this momentum and continue to significantly improve our business in 2015.”

During the course of fiscal 2014, J.C. Penney opened its first ever store in Brooklyn, NY, giving JCPenney a location in all five boroughs of New York City. It opened 46 Sephora inside JCPenney boutiques and announced plans to open 25 additional such locations in 2015. In addition, J.C. Penney, which carries an exclusive assortment of Disney merchandise, is building on success it has enjoyed with Disney-branded Shops inside JCPenney by opening an additional 100 of the boutique departments. The company indicated that it plans to have those in operation by back-to-school 2015, an initiative that will bring the total number of J.C. Penney Disney shops to almost 700.