JCPenney Sees Holiday Same-Store Sales Success

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Fourth quarter comps up 2 percent, but investors remain unconvinced about turnaround progress

JCPenney finally released some sales figures from its fourth quarter and holiday season after coming out of December and remaining pretty closed-lipped, to investors’ chagrin. During its fourth quarter, JCPenney reports that same-store sales rose 2 percent.

For the nine-week holiday period, the company saw a 3.1 percent increase in same-store sales, primarily because of solid sales in beauty (thanks to Sephora), activewear, sweaters, outerwear, dresses, boots, men’s clothing, luggage, and housewares. This is the first time since 2011 that the company has seen holiday sales growth. Despite lingering Wall Street skepticism, CEO Mike Ullman remains positive that the 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.” Retail analyst for Gilford Securities Bernard Sosnick tells Businessweek, “Under the circumstances, it is progress. I thought the holiday season would be a really significant turning point (for JCPenney), but it may be spring.”

While an increase is certainly a positive thing to report for this company in the midst of its much-watched turnaround, analysts were still disappointed by these results, Businessweek reports. According to FactSet estimates, analysts were expecting a 4.2 percent increase. Not to mention, there are still a lot of questions waiting to be answered, a big one being to what extent the promotional holiday atmosphere hurt the company’s profits. Considering even Walmart recently lowered its profit outlook, Wall Street remains pretty skeptical about JCPenney.

The retailer recently announced it will be cutting 33 stores and 2000 jobs in order to save $65 million a year. Complete fourth quarter financial results will be posted on Feb. 26.

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