JC Penney Q3 net sales slide but gross margin improves

REPORT_ For the third quarter, JC Penney reported net sales of 2.764 billion dollars compared to 2.779 billion dollars in the third quarter of 2013, with same store sales flat for the quarter. Home and fine jewelry were among the company's top performing merchandise divisions in the quarter. Sephora inside JC Penney also continued its strong performance. Geographically, the western and northeastern regions of the country delivered the best performance.

”This quarter shows the progress we are making in the final phase of JCPenney's turnaround. We continued to significantly improve the profitability of our business with gross margin expansion of 710 basis points, a 342 million dollars improvement in EBITDA and bottom-line financial results that exceeded even our own expectations. Like most retailers, following a strong start to the back-to-school season, sales did slow in September and October as unseasonably warm weather hindered the sale of fall goods,” said Myron E. (Mike) Ullman, III, Chief Executive Officer.

For the third quarter, gross margin was 36.6 percent of sales, compared to 29.5 percent in the same quarter last year, representing a 710 basis point improvement. Operating income for the quarter was a loss of 54 million dollats which represents a 347 million dollars or 87 percent improvement over last year. EBITDA was 102 million dollars, a 342 million dollars improvement from the same period last year.

The Company's for the fourth quarter of 2014 expects comparable store sales to increase 2 percent to 4 percent and gross margin improvement of 500 to 600 basis points versus last year. For the full year, it expects comparable store sales rise to be in the range of 3.5 percent to 4.5 percent and gross margin from 500 to 600 basis points above last year.