J.C. Penney Posts Holiday Sales Gain, Overcoming Warm Winterby
Same-store sales rose 3.9%, higher than the previous Christmas
Retail chain reaffirms profit forecast for current fiscal year
J.C. Penney Co. posted a gain in holiday sales, overcoming a broader slump for department-store chains and a spell of warm weather that hurt sales of winter clothes.
Same-store sales in November and December rose 3.9 percent, the company said Thursday in a statement. The retailer reaffirmed that it would generate $645 million in adjusted earnings before interest, taxes, depreciation and amortization for the fiscal year, which runs through the end of this month. It’s also closing seven stores, or less than 1 percent of the total, after shuttering about 4 percent last year.
Chief Executive Officer Marvin Ellison cited the company’s private brands and so-called omnichannel approach -- an effort to make it easier for shoppers to buy goods on- or offline. J.C. Penney’s holiday sales, which gained 3.7 percent the previous Christmas season, buck a trend among other apparel sellers. Macy’s, the largest department-store company, saw same-store sales tumble 4.7 percent over the holidays, a worse performance than it expected. With parts of the U.S. experiencing the warmest November and December in decades, shoppers put off buying items like jackets and boots.
“Despite unprecedented warm weather that significantly affected apparel sales across the company, our focus on private brands, enhanced omnichannel execution and compelling gift giving selection resulted in strong holiday sales,” Ellison said in the statement.
The shares rose 3.7 percent to $7.26 at the close on Thursday in New York. The stock gained 2.8 percent last year, outperforming Macy’s, Nordstrom Inc. and other department-store chains. Macy’s shares lost 47 percent of their value in 2015.
The results give credence to Ellison’s contention that the chain’s turnaround is on track. The retailer also said it will generate positive free cash flow for this fiscal year, a feat it hasn’t accomplished in three years. Ellison, a former Home Depot Inc. executive who took over as CEO in August, has focused on revamping the company’s supply chain and technology, as well as selling more private brands. The company has spent recent years trying to right itself after a failed transformation under former CEO Ron Johnson in 2012.
In contrast, Macy’s results worsened this week. In addition to pushing forward with a plan to close 40 stores, the chain said it would fire or relocate an additional 3,000 employees. It’s also looking to sell stakes in key real estate, including its landmark building on West 34th Street in Manhattan’s Herald Square. This move helped lift its shares 2.1 percent on Thursday.
(A previous version of this story was corrected to adjust J.C. Penney’s 2015 stock gain.)