Retail

What to Expect From JC Penney Earnings

Chris Lange

Published: August 11, 2016 3:57 pm

Last Updated: January 13, 2020 4:40 am

J.C. Penney Co. Inc. (NYSE: JCP) is scheduled to release its fiscal second-quarter financial results before the markets open on Friday. Over the past few years this major retailer was on a serious slide, and management was looking for almost any way to turn it around. Now after a very positive 2016 thus far, J.C. Penney appears to be back in favor with investors. This has also been buoyed by very positive results from both Macy’s and Kohl’s.

There were consensus estimates from Thomson Reuters that called for a net loss of $0.15 per share on $2.93 billion in revenue. The same period from last year had a net loss of $0.41 per share on $2.88 billion in revenue. As a reminder, the second calendar quarter is never one of the best for retailers in general, so it is hard to put all the marbles on this particular report.

While the first quarter sales were below expectations, J.C. Penney maintained its annual comparable store sales guidance of 3% to 4% as a result of the positive nature of recent sales trends in the spring. It is very possible that these trends continued or strengthened over the course of the summer.

Ultimately, the company was unable to sustain the momentum from its surprise profit in the fiscal-fourth quarter when it reported first quarter earnings. However a rising tide in the sector could prove to be favorable whether the company posts a win or a loss.

Ahead of the earnings report a few analysts weighed in on J.C. Penney:

• Argus reiterated a Hold rating.
• Baird reiterated an Outperform rating.
• B.Riley reiterated a Buy rating with a $15 price target.
• Miller Tabak has a Buy rating with a $13 price target.
• Sterne Agee CRT reiterated a Buy rating.
• Goldman Sachs reiterated a Sell rating.
• Citigroup has a Neutral rating with an $8 price target.

Excluding Thursday’s move, J.C. Penney has outperformed the broad markets with the stock up 37% year to date. Over the past 52-weeks the stock is up only about 10%. Other than that, it is no secret that this retailer’s shares are still hoping and waiting for a significant turnaround to get shares back to the former glory days.

Shares of J.C. Penney were last trading up about 8.5% at $9.93 late on Thursday, with a consensus analyst price target of $11.02 and a 52-week trading range of $6.00 to $11.99.