Penney Sales Rise but Shares Fall
November 13 2015 - 8:50AM
Dow Jones News
J.C. Penney Co. reported better-than-expected sales growth,
citing strength in all of its merchandise divisions, and lifted
profit estimates for the year.
Still, shares of Penney fell 5.6% to $8.30 in premarket trading
as other mall-based retailers have warned about weak spending by
consumers heading into the holiday season.
Penney didn't offer specific commentary about the current
quarter but did raise its earnings outlook for the year. The
company said it now expects adjusted earnings before interest,
taxes, depreciation and amortization of $645 million, up from its
August estimate of $620 million.
On Thursday, Nordstrom Inc. cut its profit and sales forecasts,
saying it didn't expect consumer trends to improve in the fourth
quarter. Macy's Inc., meanwhile, warned Wednesday that it would
have to make heavy markdowns to clear unsold goods after sales fell
short in its most recent period.
As for the third quarter, Penney said all of its merchandise
divisions reported sales growth at established stores from a year
ago. Among the company's top-performing divisions were men's, home,
footwear, handbags and the cosmetics chain Sephora, Penney
said.
Overall, Penney's loss narrowed to $137 million, or 45 cents a
share, from $188 million, or 62 cents a share, a year earlier.
Analysts polled by Thomson Reuters had expected a loss of 55 cents
a share.
Sales rose 4.8% to $2.9 billion, better than analysts' forecast
of $2.88 billion. Sales at existing stores rose 6.4%, which the
company had reported Wednesday.
Gross margin widened to 37.3% from 36.6% a year earlier, helped
by improvements in clearance and promotions.
Write to Anne Steele at Anne.Steele@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 13, 2015 08:35 ET (13:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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