PLANO, Texas – (Aug. 12, 2016) – J. C. Penney Company, Inc. (NYSE: JCP) today announced financial results for its second quarter ended July 30, 2016. Comparable sales increased 2.2 % for the second quarter, delivering a two-year stack of 6.3%. Net loss improved 52% to $(56) million versus the prior year.
Marvin R. Ellison, chairman and chief executive officer, said, “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 or 59 % increase in EBITDA to $229 million for the quarter. We are continuing to win market share and improve the bottom line of our business thanks to the commitment and hard work of our over 100,000 associates.”
Ellison continued, “We are excited about the initiatives we have in place to drive incremental growth in the back half of the year with our appliance rollouts, new Sephora locations, center core refreshes, in-store .com fulfillment and our chain wide rollout of buy online, pick up in store same day. These and other initiatives reinforce our confidence in our ability to achieve $1 billion in EBITDA for 2016.”
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.
For the second quarter, gross margin was 37.1 % of sales, a 10 basis point improvement compared to the same period last year.
SG&A expenses for the quarter decreased $48 million to $853 million, or 29.2 % of sales, representing a 210 basis point improvement from last year. These savings were primarily driven by lower corporate overhead, incentive compensation, store controllable costs and more efficient advertising spend.
For the second quarter, the Company delivered a 52% improvement in net loss over the prior year to $(56) million or $(0.18) per share. Excluding the previously announced write-off of unamortized debt issuance costs of $34 million related to the closing of the real estate term loan refinancing and other items, adjusted earnings per share improved 88% to a loss of $(0.05) per share for the second quarter this year compared to a loss of $(0.40) per share last year.
EBITDA improved $85 million to $229 million for the quarter, a 59 % improvement from the same period last year. Excluding restructuring charges and the proportional share of net income from the home office land joint venture, adjusted EBITDA improved 69 % to $233 million, a $95 million improvement from the same period last year.
A reconciliation of GAAP to non-GAAP financial measures is included in the schedules accompanying the consolidated financial statements in this release.
The Company reaffirms its 2016 full year guidance as follows:
The Company also announced an upcoming new store location in San Bernardino, Calif. at Inland Center, and the relocation of its store in Salinas, Calif. to a new space within Northridge Mall. The new store and relocation are both landlord funded projects, and are expected to be complete this fall. Each location will offer an appliance showroom, an expansive Sephora inside JCPenney and a flagship Salon by InStyle.
1 A reconciliation of non-GAAP forward-looking projections to GAAP financial measures is not available as the nature or amount of potential adjustments, which may be significant, cannot be determined at this time.
Second Quarter Earnings Conference Call Details
At 8:30 a.m. ET today, the Company will host a live conference call conducted by chairman and chief executive officer Marvin R. Ellison and chief financial officer Ed Record. Management will discuss the Company’s performance during the quarter and take questions from participants. To access the conference call, please dial (844) 243-9275, or (225) 283-0394 for international callers, and reference 56348291 conference ID or visit the Company’s investor relations website at http://ir.jcpenney.com.
Telephone playback will be available for 7 days beginning approximately two hours after the conclusion of the meeting by dialing (855) 859-2056, or (404) 537-3406 for international callers, and referencing 56348291 conference ID.
Investors and others should note that we currently announce material information using SEC filings, press releases, public conference calls and webcasts. In the future, we will continue to use these channels to distribute material information about the Company and may also utilize our website and/or various social media to communicate important information about the Company, key personnel, new brands and services, trends, new marketing campaigns, corporate initiatives and other matters. Information that we post on our website or on social media channels could be deemed material; therefore, we encourage investors, the media, our customers, business partners and others interested in our Company to review the information we post on our website as well as the following social media channels:
Any updates to the list of social media channels we may use to communicate material information will be posted on the Investor Relations page of the Company’s website at www.jcpenney.com
(972) 431-3400 or email@example.com
(972) 431-5500 or firstname.lastname@example.org
J. C. Penney Company, Inc. (NYSE:JCP), one of the nation’s largest apparel and home furnishings retailers, is on a mission to ensure every shopping experience is worth the customer’s time, money and effort. Whether shopping jcp.com or visiting one of over 1,000 store locations across the United States and Puerto Rico, customers will discover a broad assortment of products from a leading portfolio of private, exclusive and national brands. Supporting this value proposition is the warrior spirit of over 100,000 JCPenney associates worldwide, who are focused on the Company’s three strategic priorities of strengthening private brands, becoming a world-class omnichannel retailer and increasing revenue per customer. For additional information, please visit jcp.com.
This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expect” and similar expressions identify forward-looking statements, which include, but are not limited to, statements regarding sales, gross margin, selling, general and administrative expenses, earnings and cash flows. Forward-looking statements are based only on the Company’s current assumptions and views of future events and financial performance. They are subject to known and unknown risks and uncertainties, many of which are outside of the Company’s control that may cause the Company’s actual results to be materially different from planned or expected results. Those risks and uncertainties include, but are not limited to, general economic conditions, including inflation, recession, unemployment levels, consumer confidence and spending patterns, credit availability and debt levels, changes in store traffic trends, the cost of goods, more stringent or costly payment terms and/or the decision by a significant number of vendors not to sell us merchandise on a timely basis or at all, trade restrictions, the ability to monetize non-core assets on acceptable terms, the ability to implement our strategic plan including our omnichannel initiatives, customer acceptance of our strategies, our ability to attract, motivate and retain key executives and other associates, the impact of cost reduction initiatives, our ability to generate or maintain liquidity, implementation of new systems and platforms including EMV chip technology, changes in tariff, freight and shipping rates, changes in the cost of fuel and other energy and transportation costs, disruptions and congestion at ports through which we import goods, increases in wage and benefit costs, competition and retail industry consolidations, interest rate fluctuations, dollar and other currency valuations, the impact of weather conditions, risks associated with war, an act of terrorism or pandemic, the ability of the federal government to fund and conduct its operations, a systems failure and/or security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or Company information, legal and regulatory proceedings and the Company’s ability to access the debt or equity markets on favorable terms or at all. There can be no assurances that the Company will achieve expected results, and actual results may be materially less than expectations. Please refer to the Company’s most recent Form 10-K for a further discussion of risks and uncertainties. Investors should take such risks into account and should not rely on forward-looking statements when making investment decisions. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We do not undertake to update these forward-looking statements as of any future date.