J.C. Penney reports surprise profit, same-store sales top estimates

J.C. Penney Co Inc on Thursday reported a surprise adjusted profit and a smaller drop in comparable sales than anticipated for the fourth quarter, buoyed by demand for women’s apparel, sending its shares up about 3% before the bell.

The century-old department store chain under Chief Executive Officer Jill Soltau has been shutting unprofitable stores, while testing a new store model that includes a yoga studio, a videogame lounge and lifestyle workshops to fight competition from Amazon.com Inc and discount retailers.

It has also partnered with resale clothing company thredUP and relaunched its a.n.a brand with new all-inclusive sizes of jeans, fits and fabrics to appeal to younger consumers.

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“I am encouraged by our progress, especially in our women’s apparel businesses,” CEO Soltau said in a statement.

However, the company said it excepts comparable sales in fiscal 2020 to fall between 3.5% and 4.5%, much lower than the Wall Street estimate of a 1.22% drop. It also expects to close at least six store locations.

Sales at stores open for more than a year fell 7% in the quarter ended Feb. 1 compared with expectations of a 7.3% slide, according to data from IBES Refinitiv.

Revenue fell 7.7% to $3.49 billion, slightly above expectations of $3.44 billion.

Net income fell to $27 million, or 8 cents per share, from $75 million, or 24 cents per share, a year earlier. On an adjusted basis, it earned 13 cents in the quarter, surpassing the estimate of a 6 cent loss.