J.C. Penney stock jumps on narrower loss, higher sales

J.C. Penney reported a narrower loss in its second quarter on stronger-than-expected sales as the department store chain continues its turnaround.

Penney shares (ticker: JCP) rose 45 cents, or 5.6 percent, to $8.52. The stock has lost nearly 80 percent of its value since February 2012, when early enthusiasm over then-CEO Ron Johnson’s reinvention plan pushed the stock to $43.

The results, announced early Friday, offer encouraging signs for the Plano-based retailer, which is trying to recover from the disastrous attempt to reinvent itself under Johnson, a former Apple executive.

But it still faces big challenges heading into the final months of the year in an economy that is tripping up the chain’s middle-income shoppers. Spending is also shifting away from department store specialties such as clothing and toward restaurants, cars and smartphones.

The figures were released a few weeks after Marvin Ellison, a former Home Depot executive, officially took over as CEO from Myron Ullman, who became executive chairman of the board.

Ullman returned to the helm in April 2013 after Johnson was pushed out. Ullman helped pick Ellison, and the two executives have run the company together since November.

Under Ullman’s second tenure, Penney has tried to right itself by restoring frequent discounts and bringing back basic merchandise and popular store brands that Johnson eliminated. Now Ellison is tasked with boosting sales growth by sprucing up some departments like jewelry and expanding its e-commerce business after it fell behind rivals.

J.C. Penney lost $138 million, or 45 cents a share, for the quarter that ended Aug. 1. That compares with a loss of $172 million, or 56 cents a share, a year earlier. Losses, adjusted for one-time gains and costs, were 41 cents a share.

The average estimate of 10 analysts surveyed by Zacks Investment Research was a loss of 50 cents a share.

Revenue rose 2.7 percent to $2.88 billion, also topping Wall Street forecasts. Revenue at stores open at least a year rose 4.1 percent, in line with analysts’ estimates.

This story was originally published August 14, 2015 at 9:42 AM with the headline "J.C. Penney stock jumps on narrower loss, higher sales."