Share of JC Penney plunged 11% in pre-market trading, after 1QFY14 results were announced in after-market trading yesterday.
Share of JC Penney Company Inc. (NYSE:JCP), the U.S. departmental store, plunged 11% in pre-market trading, after the announcing financial results of fourth quarter 2014 (1QFY14) in after-market yesterday.
The retailer posted a quarterly loss in 1QFY14 as its spending rose on store expansion and it offered more than required discounts during the holiday season.
The net loss was $59 million ($0.19 per share) in the quarter, down from net earnings of $35 million ($0.11 per share) in prior-year quarter. The company also realized a $270 million tax-gain during the quarter. Adjusted earnings per share (EPS) were in line with analysts’ forecast of $0.11.
Sam-store sales mounted 4.4% year-on-year (YoY), beating the Street’s estimates, as per Consensus Metrix. Net revenues of the chain climbed 2.9% YoY to $3.89 billion in 4QFY14, compared to $3.78 in 4QFY13. Analysts forecast net revenues of $3.87 billion.
The Texas-based retailer expects same-store sales growth between 3-5% for the 1QFY15, which is a downgrade compared to previous forecast of mid-single digit growth for FY15-FY17. The Street estimates growth of 3% for 1QFY15.
Where analysts are looking for margin growth of 150 percentage points (pp) for FY15, the retailer expects margin to jump in range of 50-100 pp. Analysts have projected free cash flow of $25.4 million this year, the retailer excepts it to be flat, compared to $57 million in FY15
“2014 was a successful year for JC Penney,” JCP CEO Myron Ullman said in quarterly/full-year press release. “We are back in the eyes of our customers, back running the business effectively and back on solid financial footing. We fully intend to build on this momentum and continue to significantly improve our business in 2015.”
Since taking the role of CEO, Mr. Ullman is striving to reduce the losses and focus on revitalizing revenues growth of the company, using a strategy that comprises of increasing products and revamping marketing.
Same-store sales of the company were pulled up by holiday season sale, especially high demand for apparel, jewelry and household products. Lower fuel prices and increasing jobs, which led to an increase in spending, throughout the holiday season helped many online retailers including Macy’s Inc. (NYSE:M) and Sears Holding s Corp. (NASDAQ:SHLD) in increasing their same-store sales.
JCP stocks closed at $7.44 after a decrease of $0.05 at 0.67% during after hours. The company shares were trading at $7.49 an increase of 2.46% during trading hours as of 7:59 PM before the weekend
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