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JCPenney narrows loss in Q2, comparable sales up 2.2 percent

By Prachi Singh

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Business

J. C. Penney Company’s comparable sales increased 2.2 percent for the second quarter, delivering a two-year stack of 6.3 percent. Net loss improved 52 percent to 56 million dollars or 0.18 dollar per share versus the prior year.

“We are pleased with the sequential improvement we achieved throughout the second quarter, and our solid performance across all key metrics is encouraging. We exceeded our profitability expectations, achieving an 85 million dollars or 59 percent increase in EBITDA to 229 million dollars for the quarter. Our new initiatives reinforce our confidence in our ability to achieve one billion dollars in EBITDA for 2016,” said Marvin R. Ellison, Chairman and CEO of the company.

Manages to narrow loss, reconfirms outlook

For the quarter, Sephora, home, and footwear and handbags were the company's top performing divisions. Geographically, the Ohio Valley and Pacific were the best performing regions of the country. Gross margin was 37.1 percent of sales, a 10 basis point improvement compared to the same period last year.

Excluding the previously announced write-off of unamortized debt issuance costs of 34 million dollars related to the closing of the real estate term loan refinancing and other items, adjusted earnings per share improved 88 percent to a loss of 0.05 dollar compared to a loss of 0.40 dollar per share last year.

The company has reaffirmed its 2016 full year guidance. It expects comparable store sales to increase 3 percent to 4 percent, gross margin is expected to increase 10 to 30 basis points and EBITDA is expected to be one billion dollars and adjusted earnings per share are expected to be positive.

The Company also announced an upcoming new store location in San Bernardino, California at Inland Center, and the relocation of its store in Salinas, California to a new space within Northridge Mall. Each location will offer an appliance showroom, an expansive Sephora inside JCPenney and a flagship Salon by InStyle.

Picture:JCPenney

JCPenney