YASTEST
Company adjusts
full-year guidance
PLANO, Texas
- (Oct. 27, 2017) - J. C. Penney
Company, Inc. (NYSE: JCP) today provided a preliminary update
on its expected third quarter performance, following actions taken
during the quarter to accelerate the liquidation of inventory. The
Company's fiscal third quarter ends Oct. 28.
"Based on the encouraging results
from a third quarter reset in women's apparel, which expanded our
casual and contemporary offering, we made the strategic decision to
accelerate a wider transformation of the entire women's department
by clearing slow-moving inventory primarily in women's and other
apparel categories. Following this comprehensive reset, we saw an
improvement in performance, particularly in our women's division,
confirming these actions were necessary to drive growth in our
women's apparel business," said Marvin R. Ellison, chairman and
chief executive officer for JCPenney.
For the third quarter, the Company
expects that comparable store sales will increase in the range of
0.6 % to 0.8 % and cost of goods sold, which excludes depreciation
and amortization, will increase 300 to 320 basis points compared to
the same period last year, impacted primarily by a greater sales
penetration in major appliances and e-commerce and the decision to
accelerate the liquidation of inventory. The Company expects third
quarter adjusted earnings per share to be in the range of ($0.45)
to ($0.40)1.
Additionally, the Company took
steps during the third quarter to create an integrated business
function that combines the capabilities of its pricing and planning
& allocation teams to work under the oversight of the Company's
newly appointed chief financial officer. Centralizing those
functions allows the Company to streamline its pricing, promotion
and markdown strategies, and consolidate all forecasting and
planning capabilities to begin improving its predictive analytics
and provide leadership with a more focused view of current sales
trends.
"With a sharper and more
disciplined focus on inventory management, we are taking a
comprehensive approach to assessing the effectiveness of our
inventory positions to make swift, informed decisions that promote
faster inventory turn and higher productivity levels. Therefore, in
the third quarter, we took the necessary steps to accelerate
inventory liquidation primarily across all apparel divisions, which
increases available funding to invest in new and trending
merchandise categories.
We realize the inventory
liquidation favorably impacted sales during the months of September
and October; however, we expect to deliver a positive low
single-digit sales comp for this period, excluding the benefit of
clearance sales. Although these actions will create a
short-term negative impact to cost of goods sold and earnings, long
term, we firmly believe it was the right decision for the Company
as we transition into the fourth quarter and fiscal 2018. In
addition, based on the way our business is growing, including
continued comp sales growth penetration in major appliances and
omnichannel in the third quarter, we are taking a renewed approach
to aligning our expense structure to match the mix of our growth
initiatives. We look forward to providing more details about
our third quarter performance during our earnings call on November
10th," added Ellison.
Outlook
The Company has updated its 2017 full year guidance for comparable
store sales, cost of goods sold, adjusted earnings per share, and
free cash flow and reaffirmed its guidance for SG&A. The fiscal
2017 full year guidance has been updated as follows:
-
Comparable store sales: now expected to be -1 %
to 0 %;
-
Cost of goods sold: now expected to be up 100 to
120 basis points versus 2016;
-
SG&A dollars: expected to be down 1 to 2 %
versus 2016;
-
Adjusted earnings per share1: now
expected to be a positive $0.02 to $0.08; and
-
Free cash flow1: now expected
to be $200 million to $300 million.
1 A
reconciliation of non-GAAP forward-looking projections to GAAP
financial measures is not available as the nature or amount of
potential adjustments, which may be significant, cannot be
determined at this time.
Third Quarter
Fiscal 2017 Financial Results Conference Call
The Company also announced today that it will release its third
quarter 2017 financial results on Friday, Nov. 10, at 7:30 a.m.
ET. The news release will be followed by a live conference
call and webcast conducted by Chairman and Chief Executive Officer
Marvin R. Ellison and Chief Financial Officer Jeff Davis that will
begin at 8:30 a.m. ET.
To access the conference call,
please dial (844) 243-9275, or (225) 283-0394 for
international callers, and reference 3996839 conference
ID or visit the Company's investor relations website at
http://ir.jcpenney.com. Supplemental slides will be available on
the Company's investor relations website approximately 10 minutes
before the start of the conference call.
Telephone playback will be
available for seven days beginning approximately two hours after
the conclusion of the conference call by dialing (855)
859-2056, or (404) 537-3406 for international callers, and
referencing 3996839 conference ID.
Investors and others should note
that we currently announce material information using SEC filings,
press releases, public conference calls and webcasts. In the
future, we will continue to use these channels to distribute
material information about the Company and may also utilize our
website and/or various social media to communicate important
information about the Company, key personnel, new brands and
services, trends, new marketing campaigns, corporate initiatives
and other matters. Information that we post on our website or
on social media channels could be deemed material; therefore, we
encourage investors, the media, our customers, business partners
and others interested in our Company to review the information we
post on our website as well as the following social media
channels:
Facebook (https://www.facebook.com/jcp) and Twitter
(https://twitter.com/jcpnews).
Any updates to the list of social
media channels we may use to communicate material information will
be posted on the investor relations page of the Company's website
at www.jcpenney.com.
Media
Relations:
(972) 431-3400 or jcpnews@jcp.com;
follow us at @jcpnews
Investor
Relations:
(972) 431-5500 or
jcpinvestorrelations@jcpenney.com
About
JCPenney:
J. C. Penney Company, Inc. (NYSE: JCP), one of the nation's largest
apparel and home furnishings retailers, combines an expansive
footprint of approximately 875 stores across the United States and
Puerto Rico with a powerful e-commerce site, jcp.com, to connect
with shoppers how, when and where they prefer to shop. At every
customer touchpoint, she will get her Penney's worth of a broad
assortment of products from an extensive portfolio of private,
exclusive and national brands. Powering this shopping experience is
the customer service and warrior spirit of over 100,000 associates
across the globe, all driving toward the Company's three strategic
priorities of strengthening private brands, becoming a world-class
omnichannel retailer and increasing revenue per customer. For
additional information, please visit jcp.com.
Forward-Looking
Statements
This release may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expect"
and similar expressions identify forward-looking statements, which
include, but are not limited to, statements regarding sales, cost
of goods sold, selling, general and administrative expenses,
earnings and cash flows. Forward-looking statements are based only
on the Company's current assumptions and views of future events and
financial performance. They are subject to known and unknown risks
and uncertainties, many of which are outside of the Company's
control that may cause the Company's actual results to be
materially different from planned or expected results. Those risks
and uncertainties include, but are not limited to, general economic
conditions, including inflation, recession, unemployment levels,
consumer confidence and spending patterns, credit availability and
debt levels, changes in store traffic trends, the cost of goods,
more stringent or costly payment terms and/or the decision by a
significant number of vendors not to sell us merchandise on a
timely basis or at all, trade restrictions, the ability to monetize
non-core assets on acceptable terms, the ability to implement our
strategic plan including our omnichannel initiatives, customer
acceptance of our strategies, our ability to attract, motivate and
retain key executives and other associates, the impact of cost
reduction initiatives, our ability to generate or maintain
liquidity, implementation of new systems and platforms, changes in
tariff, freight and shipping rates, changes in the cost of fuel and
other energy and transportation costs, disruptions and congestion
at ports through which we import goods, increases in wage and
benefit costs, competition and retail industry consolidations,
interest rate fluctuations, dollar and other currency valuations,
the impact of weather conditions, risks associated with war, an act
of terrorism or pandemic, the ability of the federal government to
fund and conduct its operations, a systems failure and/or security
breach that results in the theft, transfer or unauthorized
disclosure of customer, employee or Company information, legal and
regulatory proceedings and the Company's ability to access the debt
or equity markets on favorable terms or at all. There can be
no assurances that the Company will achieve expected results, and
actual results may be materially less than expectations. Please
refer to the Company's most recent Form 10-Q for a further
discussion of risks and uncertainties. Investors should take such
risks into account and should not rely on forward-looking
statements when making investment decisions. Any forward-looking
statement made by us in this press release is based only on
information currently available to us and speaks only as of the
date on which it is made. We do not undertake to update these
forward-looking statements as of any future date.
###
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: J. C. Penney Company, Inc. via Globenewswire
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