J.C. Penney Co.'s (NYSE: JCP) fiscal third-quarter loss widened as the retailer's sales and margins weakened, but the company is already seeing improvements and expects a turnaround in the coming holiday shopping season.
J.C.Penney incurred a net loss of $489 million or $1.94 per share in the third quarter, which included a $0.73 loss associated with the tax valuation allowance. This compares with last year's loss of $123 million, or $0.56 per share.
The company reported net sales of $2.78 billion, down 5.1 percent from the third quarter of 2012 and just shy of analysts' estimates of $2.79 billion. Comp-store sales slipped 4.8 percent for the quarter.
Gross margin in the third quarter fell to 29.5 percent of sales, compared to 32.5 percent in the same quarter last year, which J.C. Penney said is the result of lower clearance margins and a higher number of clearance items sold.
"Our strategies to reconnect with customers are beginning to take hold, and this became increasingly clear as the quarter progressed," Mike Ullman, J.C. Penney's CEO said in a statement. "This is the result of the tremendous efforts of the associates across our company to restore the merchandise customers want and deliver an unmatched shopping experience. We are proud of the company's October sales performance, encouraged by the early weeks of November, and believe we are making strides toward a path to long-term profitable growth."
According the earnings report, women's apparel, men's apparel and fine jewelry were the company's top performing merchandise divisions.
J.C. Penney shares climbed more than 6 percent to $9.22 in premarket trading on Wednesday, a sign that investors are hopeful that sales trends will improve.
For more see:
This J.C. Penney press release
This Wall Street Journal article
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