J. C. Penney Shares Surge 25%; Jewelry Delivers Double-digit Comps In Q4

(RTTNews) - J. C. Penney Company, Inc. (JCP) reported fourth-quarter adjusted net income of $57 million, or $0.18 per share, compared to adjusted net income of $160 million, or $0.51 per share, last year. On average, 14 analysts polled by Thomson Reuters expected the company to report profit per share of $0.11 for the quarter. Analysts' estimates typically exclude special items.

Total net sales for the fourth quarter decreased 9.5% to $3.67 billion compared to $4.05 billion for the fourth quarter last year. Analysts expected revenue of $3.79 billion for the quarter. On a shifted basis, which compares the 13 weeks ended Feb. 2, 2019 and Feb. 3, 2018, comparable sales decreased 4.0%. On an unshifted basis, comparable sales for the fourth quarter decreased 6.0%. Jewelry, Women's Apparel, Children's Apparel and Men's Apparel were the company's top performing divisions during the quarter. Jewelry delivered double-digit comps, for the quarter.

Full year 2018 adjusted net loss was $296 million, or $0.94 per share, compared to adjusted net income of $31 million, or $0.10 per share, last year. Total net sales for fiscal 2018 decreased 7.1% to $11.66 billion compared to $12.55 billion, prior year. Comparable sales decreased 3.1% for the year.

J. C. Penney generated positive operating cash flow of $359 million and free cash flow of $111 million in fiscal 2018. The company reduced inventory levels by 13.1% for the year. J. C. Penney noted that it has no significant unsecured debt maturities until 2036.

Looking forward, J. C. Penney said the company currently expects free cash flow to be positive for fiscal 2019. Shares of the company were up more than 25% in pre-market trade on Thursday.

J. C. Penney has determined that it will close 18 full-line stores in 2019, including the three locations previously announced in January. The company will also close 9 ancillary home and furniture stores. Nearly all impacted stores are expected to close in the second quarter of 2019. During the first half of 2019, the company expects to record an estimated pre-tax charge of approximately $15 million, primarily relating to non-cash asset impairments and transition costs.