J.C.Penney’s weak Q1 nothing but raises its FY15 outlook

J.C.Penney might have just reported a weaker-than-expected performance over the first quarter, but the affordable apparel chain is more confident than ever in reaching its ambitious recovery goals.

Even if the department store retailer made a bigger dent in its first-quarter loss than analysts expected, total sales were positive. Actually, with the optimistic mode on, J.C. Penney had enough confidence in its performance to reiterate the tough three-year goals it first outlined in October and increase its guidance on its full-year results.

As advanced Wednesday, the retailer expects 2015 sales to increase 4 percent to 5 percent, compared to its previous guidance of 3 percent to 5 percent sales growth.

Aimed to reach those growth targets, the retailer is going on the offensive to gain back market share, CEO Mike Ullman said, reported the NBC.

“With an average price point of 15 dollars, we’re helping them get what they need for their families,” explained Ullman, stating that Penney needs to lure the middle-class into its stores to meet its targets. Penney is trying to get back more spending from its customers, Ullman said.

The company’s CEO also recalled that, in short, J.C. Penney’s goal is to regain 2 billion dollars in sales over the next three years.

J.C. Penney “back in business for Easter this year”

“Penney has historically been a destination for dress up. I’m happy to report we were back in business for Easter this year,” said a contempt Ullman, further pinpointing that men’s and women’s apparel were the best-performing categories during the quarter, especially tailored men’s clothing, women’s dresses and kids’ dress-up apparel.

Other channel that has seen growth during the first three months of the department stores operator’s fiscal year was e-commerce, with more customers were shopping online in the first quarter and having merchandise shipped to stores. About 20 percent of the time, those customers make additional purchases when they’re in the store, added Marvin Ellison, who will become J.C. Penney’s CEO Aug. 1. Ullman will stay on as executive chairman for one year.

Shares of J.C. Penney Co (JCP) were higher by 3.1 percent to 8.98 dollars in after-hours trading Wednesday, following the company's first quarter earnings release. Analysts had expected J.C. Penney to report a loss of 76 cents a share, while those market experts polled by Thomson Reuters also forecast a 2.2 percent increase in total sales.

For the quarter, J.C. Penney posted a narrower than expected loss of 57 cents per share, compared to the loss of 76 cents per share consensus estimate, according to analysts surveyed by Thomson Reuters.

Revenue came in at 2.86 billion dollars for the period, matching the 2.86 billion dollars analysts were expecting. Net loss was of 167 million dollars, or 55 cents a share, in the quarter that ended May 2, compared with a loss of 352 million dollars, or 1.15 dollars a share, a year ago.

On a brighter note, total sales increased 2 percent from 2.80 billion dollars a year ago to 2.86 billion dollars.