J C Penney Company Inc (NYSE:JCP) cratered by more than 16% on Friday after the company’s second-quarter earnings report, released before the opening bell. The department store chain lost 9 cents per share for the quarter, more than double the 4-cent loss Wall Street had expected, though $2.96 billion in revenues beat consensus estimates of $2.84 billion in sales.
In last year’s second quarter, JCPenney reported $2.92 billion in revenue and adjusted losses of 5 cents per share or $16 million. In other words: Things aren’t getting much better.
JCP’s Q2 2017 earnings
On a GAAP basis, JCPenney posted a loss of 20 cents per share or $62 million, compared to 18 cents per share or $56 million in losses last year. Same-store sales fell 1.3% year-over-year, compared to the consensus of a 1.2% decline. Adjusted EBITDA fell to $196 million from $233 million in the year-ago quarter.
JCP’s earnings were hit by liquidations of inventory from 127 of the stores it closed. The liquidations weighed on the company’s gross margin and earnings per share, and CEO Marvin Ellison said the charges were isolated to the second quarter. Inventory fell 6.8% year-over-year to $2.8 billion. In addition to the liquidation from the closing stores, comparable-store inventory fell 3.7% year-over-year, which also contributed to the 6.8% decline in total inventory.
He also said that almost all of the retailer’s categories saw improving sales trends during the quarter. J C Penney’s best-performing divisions were Home, Fine Jewelry, Footwear and Handbags, Sephora, and Salon. The Southwest and Southeast regions were the department store chain’s best-performing geographic areas.
JCPenney Affirms Guidance
The department store chain also affirmed its full-year guidance of 40 cents to 65 cents per share of JCP stock in adjusted earnings. JCPenney also continues to expect same store sales to be down 1% to up 1% year over year.
The company added that fiscal 2017 will have 53 weeks, while 2016 only had 52 weeks. The retailer included the extra week in its guidance numbers, except for the comparable store sales estimate, which was calculated on a comparable 52-week basis.
After JCPenney’s Q2 earnings were released, JCP stock plummeted almost 23% before “recovering” to 16%-plus declines.That puts shares at a miserable 52% decline for 2017.
The post J C Penney Company Inc Tanks 23 Percent After Q2 2017 Earnings appeared first on ValueWalk.
