J.C. Penney Co., Inc. (NYSE: JCP) slid 18% by midday after reporting worse than expected Q2 results, but it did have some positive outlooks.
The major retailer announced an adjusted net loss of $0.09 per share, more than double the consensus estimates of $0.04 a share, as well as a decrease in same-store sales of 1.3%, just above the expected 1.2%. According to Marvin Ellison, CEO of JCP, the liquidation of 127 closing stores hit earnings per share and gross margin especially hard, but he reiterated that the closings were a one-time ordeal, pointing to an unchanged full year guidance to reassure investors.
As internet sales continue to grow in the double digits as well as new initiatives such as 300 mattress showrooms, increased focus on appliances and the expansion of sportswear, the company is betting on the long-term. 32 new Sephora locations have been opened as well as 31 highly-productive locations expanded in the hopes that Rhianna’s new makeup line, Fenty Beauty, will help drive sales.
Though it missed the mark by quite some distance, the guidance for 2017 has not changed, with same-store sales still expected to be in the -1% - 1% range, with an adjusted non-GAAP EPS of $0.40 - $0.65. However, now the company needs to exceed expectations in the following quarter in order to maintain these standards, not miss them.