J. C. Penney beats by $0.15, misses on revs; reaffirms FY17 EPS, comps, EBITDA; lowers gross margin guidance
- Reports Q1 (Apr) loss of $0.22 per share, $0.15 better than the Capital IQ Consensus of ($0.37); revenues fell 1.6% year/year to $2.81 bln vs the $2.92 bln Capital IQ Consensus. Co preannounced EBITDA above its expectations on Monday.
- Comps -0.4% vs. +3.2% estimates.
- Co reaffirms guidance for FY17, positive EPS vs. $0.08 Capital IQ Consensus; comparable store sales: expected to increase 3 % to 4 %; EBITDA: expected to be $1 billion; Free cash flow: expected to improve versus 2015.
- Lowers gross margin: to increase 10 to 30 basis points from +40-60 bps, reflecting the rollout of appliances and the rapid growth of our online business. Having said that, we remain confident that our turnaround remains on track, and we are excited about our 2016 sales drivers including new Sephora locations, Center Core enhancements and our nationwide rollout of major appliances announced earlier this week.
- "The first quarter was clearly challenging from a sales perspective. Although our business was not immune to the issues facing other retailers, I am pleased that we were able to deliver our second consecutive quarter of positive operating profit. In addition, the teams did an excellent job of proactively managing the business throughout the quarter to ensure we remained a fiscally disciplined organization. As a result, we exceeded our profitability expectations, achieving a 63 % increase in EBITDA to $176 million for the quarter."