J.C. Penney Friday reported Q2 results that beat analysts’ expectations, with revenue of $2.88 billion, compared to an expected $2.86 billion. Q2 sales were $2.88 billion compared to $2.80 billion year over year, and Q2 same-store sales rose 4.1 %.
Q2 losses narrowed to $138 million, or 45 cents per share, compared to a loss of $172 million, or 56 cents per share, year over year. The company said current Q3 sales will grow even faster and keeps its full-year guidance for sales to a 4% to 5% increase.
The company said that men's, home, fine jewelry, and its in-store Sephora concessions, which saw a double-digit increase in the quarter, did especially well. Stores in all regions of the country saw year-over-year sales with Western and Midwestern stores faring best.
J.C. Penney continues its startling comeback with this quarterly report, the first under CEO Marvin Ellison, who finally took the reins just weeks ago. The retailer, which had a better quarter than Macy’s, has put store closures and other belt tightening measures behind it for the most part.
Now Ellison and his team must now create a new future for the retailer, which has in recent months been all about restoring an older status quo. The company needs to bring up its e-commerce game and figure out how to appeal to a persnickety middle-income shopper.
And it may still need to figure out a stable pricing strategy. Ron Johnson created controversy when he lowered prices in order to avoid “fake” sales and the retailer has pleased customers with the return of the practice. But the approach encourages a continued psychology of expectations of discounts, and some customers and even regulators don’t particularly like it.
"Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates," Ellison said in a statement. "I also remain confident in our ability to achieve the long-term financial targets we have laid out."