JCPenney Up +27% After Stronger-than-Expected Earnings

JCPenney

J.C. Penney Company (NYSE:JCP) announced its Fiscal Q4 results and full year 2018 earnings this morning, sending its stock soaring +27%. The Plano, Texas-based retailer hit some serious snags in its revenue in 2018, but the company just posted stronger-than-expected fourth-quarter earnings. Is this a glimmer of hope for JCPenney? Maybe.

JCPenney Glimmer of Hope in ‘Retail Apocalypse’

JCPenney stock is seeing the largest share jump its seen in over a year. The stock tumbled last year due to revenue loss—a growing trend in traditional brick-and-mortar based stores.

This morning, Victoria Secret announced the closing of several of its stores this year due to revenue loss and last week, Payless announced it would be closing all of its stores in North America due to bankruptcy. Many analysts on Wall Street have dubbed this new store trend as the ‘retail apocalypse‘.

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In the press release today, JCPenney reiterated that it still plans on closing 18 full-line stores in 2019 and nine ancillary home and furniture stores. However, its better-than-anticipated earnings in the holiday Q4 season give the retail company a glimmer of hope.

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Q4 and Full 2018 Earnings

JCPenney pulled in $3.67 billion in net sales for Q4, which is down -9.5% from its previous $4.05 billion the previous year. Jewelry, Children’s Apparel, Men’s Apparel, and Women’s Apparel were the company’s top performing divisions in the quarter. Cost of goods sold was $252 billion or 68.7% of sales, compared to $2.69 billion. 

Total net sales for fiscal 2018 was $11.66 billion, down -7.1% from the previous $12.55 billion. As per today’s press release, JCPenney expects to be free-cash-flow positive in 2019.

JCPenney Stock Movement

According to Yahoo Finance, JCP is currently trading at $1.58 a share, up +$0.34 (+27.42%). For the month, the retail stock is up +22%, but for the year, JCP is down -63.5%. In the last five years, the brick-and-mortar stock has dropped a whopping -81.8%.

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