Investors aren't pleased with J.C.Penney's (JCP).
The department store chain fell 3.2% to $7.51 during after-hours trading, retreating from big gains during the day, after posting mixed fiscal third-quarter financial results. In short, the department store chain's third-quarter sales missed already reduced expectations but its earnings loss was smaller than expected. The press release can be read here.
The stock had surged 7.78% before the closing bell to close Wednesday at $7.76.
As Marketwatch reports:
Net loss narrowed to $188 million, or 62 cents a share, from $489 million, or $1.94 a share, in the year-earlier period. That beat the 81-cent FactSet consensus loss estimate. Sales dipped 0.5% to $2.76 billion, just shy of the $2.81 billion consensus estimate. Comparable-store sales were flat. That missed the 2.2% gain analysts surveyed by Retail Metrics were looking for. Analysts already cut their sales estimates after the company warned in October that sales would fall short. Gross margin widened by 7.1 percentage points.
JC Penney has made headlines in the past for its major ups and downs. Analysts are at odds over whether the company can pull off a major turnaround, with some arguing that long-term goals are too bullish.
"A first-half sales bounce appears to be fading, and the company's chances of hitting its long-term financial goals look wobblier than canned cranberry sauce," wrote Jack Hough in last weekend's issue of Barron's (see Ahead of the Crowd, "Penney's Turnaround Gets Tougher," Nov. 8).
In today's press release, JC Penny said it sees same-store sales rising 2% to 4% in the fourth quarter and rising 3.5% to 4.5% for the full fiscal year.
The company maintained its liquidity target for the full year at $2.1 billion and expects positive free cash flow.
At its Oct. 8 analyst day, Penney set a goal of $1.2 billion in Ebitda by 2017. The path for getting there includes lifting sales at longstanding stores by 5.4% a year, boosting gross margins, and holding spending flat.
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