JCP stock is moving higher this morning after JC Penney Company Inc (NYSE:JCP) reported a narrower-than-expected loss for the third quarter.
The iconic department store chain JC Penney has been in all sorts of trouble for much of the year so far due to the mounting debt problems. Today, the company announced its financial results for the third quarter, and contrary to popular expectations, JC Penney actually managed to defy analysts’ estimates with regards to its losses.
The company managed to widen its margins and spent lower on advertising during the quarter. The Chief Executive Officer of the company, Jill Soltau, reiterated that the management’s efforts to boost sales and profits are finally taking effect.
In the third quarter, the company’s revenue fell by as much as 8.5% year-on-year to hit $2.5 billion, and the losses for the period stood at $93 million, which works out to losses of $0.93 a share. In the prior-year period, the company recorded losses of $151 million, which worked out to $0.48 a share. Sales at stores that have been open for more than 12 months dropped by 9.3%, and that reflected a wider drop than analysts’ estimates of 7.74%.
JCP stock is up 10% at $1.22.
JC Penney’s lower-than-expected losses resulted in a rally in the stock this morning, which experienced a surge of as much as 135% in premarket trade. This quarter’s performance should come as a bit of relief for the battered 117-year-old company, which has found it difficult to keep with rising competition in the retail space. Online retail has been particularly damaging to JC Penney’s business, and the company currently has billions of dollars of debt on its books.
The company has taken certain steps to turn the business around. In addition to doing away with unprofitable segments, it has also established an experimental store in order to attract more customers. Investors should definitely keep an eye on JCP stock over the coming weeks.
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