J.C. Penney Holiday Sales Not as Good as They Appear

For the holiday sales period, the company said same-store sales rose 3.1%, compared with the same period a year ago. For the full quarter, same-store sales are up about 2%, the first positive quarterly sales result since the second quarter of 2011. Sales at the company’s JCP.com website rose 26.3%.

The company’s CEO said:

While 2013 brought a lot of change and challenges to JCPenney, the steady improvements in our business show that the Company’s turnaround is on track. In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter.

J.C. Penney did not have a very high bar to clear. Same-store sales fell more than 30% in the year-ago quarter. Research firm Retail Metrics had forecast a fourth-quarter same-store sales gain for the retailer of 5.3%, and the company’s preliminary number is far short of that.

And what about profits? The company offered big discounts early and often, which will not make it easy to post a profit. And J.C. Penney does not sell consumer electronics gear, one of the most popular categories of goods for holiday sales last year.

In mid-January, J.C. Penney said it was closing 33 stores and eliminating some 2,000 jobs. But the company operates nearly 1,100 stores, and the announced closings struck investors as too little and perhaps too late.

J.C. Penney shares were up more than 4% in premarket trading Tuesday morning, at $5.89 in a 52-week range of $5.61 to $23.10. The 52-week low was posted Monday.