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Post-Earnings Review - J.C. Penney

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LONDON, August 22, 2014 /PRNewswire/ -- has issued free post-earnings review on J.C. Penney Company Inc. (NYSE: JCP) as the company featured in the headlines on Thursday, August 14, 2014, after reporting its Q2 2014 financial results. J.C. Penney Co. Inc.'s same store sale in Q2 2014 improved 6.0% Q-o-Q, highlighting a third consecutive quarter-over-quarter growth. The company's gross margin also improved 640 basis points on Y-o-Y and 290 basis points sequentially in the second quarter of 2014. Our free coverage report can be accessed at:

Earnings Overview  

For the quarter ended August 02, 2014, J.C. Penney Co. Inc.'s operating loss narrowed down to $70 million from an operating loss of $395 million in Q2 2013. The company reported non-GAAP earnings before interest, taxes, depreciation, and amortization (EBITDA) of $90 million in Q2 2014, compared to non-GAAP EBITDA loss of $252 million in the year ago quarter. The company's online sales through were up 16.7% Y-o-Y to $249 million in the reported quarter. Meanwhile, gross margin in Q2 2014 rose to 36.0% from 29.6% in the prior year comparable quarter. During the reported quarter, gross margin was positively impacted by company's improved clearance sales performance. As on August 02, 2014, inventory stood at $2.85 billion, down 9.7% on year-over-year basis. J.C. Penney Co. Inc. reported a free cash flow of $76 million as on August 02, 2014, compared with a negative free cash flow of $1,146 million as on August 3, 2013. The free research on JCP can be downloaded as in PDF format at:

For the second quarter 2014, selling, general & administrative (SG&A) expenses were down $62 million to $964 million, or 34.4% of sales, representing a 410 basis point improvement from last year, primarily driven by lower store expenses, net advertising and corporate overhead as well as improved credit income. In the upcoming quarter, the company expects - a mid-single digit rise in comparable store sales; Gross margin to be in line with Q2 2014; and SG&A expenses to be slightly above last year's levels. For FY 2014, the company expects - a mid-single digits growth in comparable sales; Gross margin to be significantly above FY 2013 level; positive free cash flow; capital expenditure of approximately $250 million and depreciation and amortization value of approximately $640 million.

Myron E. (Mike) Ullman, III, J.C. Penney Co. Inc.'s Chief Executive Officer said in a recent press release that the company's turnaround initiatives continue to produce improved financial results. He added that during Q2 2014, the company reported gains in market share and marked improvement in gross margin in a highly competitive promotional environment. Mr. Ullman informed that the company expects to continue to report profitable sales this back to school season supported by its unique assortment of powerful private brands, key national brands and exclusive attractions, all at a price that fits customer budget. He added that as the company nears the end of its turnaround initiatives, it is now focused on reestablishing J.C. Penney Co. Inc. as the premier shopping destination for the moderate consumer.

The Plano, Texas-based multiline retailer reported net sales of $2.80 billion in Q2 2014, compared to $2.66 billion in the second quarter of 2013 and Bloomberg analyst's net sales expectations of $2.78 billion. The company's GAAP net loss in the reported quarter stood at $172 million or $0.56 loss per share in Q2 2014, as compared to GAAP net loss of $586 million, or $2.66 loss per share in the prior year quarter, and Bloomberg consensus GAAP net loss estimate of $291.60 million, or $0.96 loss per share. Meanwhile, the company's non-GAAP net loss stood at $228 million, or $0.75 loss per share, as compared to non-GAAP net loss $477 million, or $2.16 loss per share in the prior year quarter and Bloomberg analyst non-GAAP net loss estimates of $293.43 million, or $0.90 loss per share. Sign up and read the free analyst's notes on JCP at:

Stock Performance 

A day after the earnings release, on Friday, August 15, 2014, J.C. Penney Co. Inc.'s shares lost 2.46% to end the session at $9.50. On the last close, Thursday, August 21, 2014, J.C. Penney Co. Inc.'s shares fell 1.55% further to end the day at $10.17, after vacillating between $10.06 and $10.54. A total of 22.60 million shares were traded, which was above its three months average volume of 16.69 million shares. J.C. Penney Co. Inc.'s shares have gained 3.04% in the previous three trading sessions, 17.44% in the last one month, and 11.15% on YTD basis. The stock is trading above its 50-day and 200-day moving averages of $9.06 and $8.33, respectively. Furthermore, J.C. Penney Co. Inc.'s stock has a Relative Strength Index (RSI) of 68.90. Visit Investor-Edge and access the latest research on JCP at:

Sneak Peek to Corporate Insider Trading 

In the last one month, Myron E. (Mike) Ullman, III, CEO and Director at J.C. Penney Co. Inc. bought a total of 1,170 shares worth $11,180.79 at an average price of $9.56. Complimentary in-depth research on JCP is available at:


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