Boston, MA 05/30/2014 (wallstreetpr) – J.C. Penney Company, Inc. (NYSE:JCP) reported the first quarter results ended May 3, 2014 with sales growth over comparable stores and improved its gross margin.
Comparable store sales growth
During the first quarter (1Q2014), JCPenney’s net sales were $2.8 billion versus $2.6 billion in the first quarter 2013 (1Q2013). The increase was due to 6.2% year over year increase in same store sales as a result of the gain in sales across different categories, including home, jewelry and apparels for both Men and Women.
The retailer also delivered gain on sales geographically during the quarter versus last year, of which western and central region showed the best performance. Correspondingly, gross margin for the period improved by 230 basis points to 33.1% from 30.8% in 1Q2013.
Adjusted operating loss for the quarter was $242 million that improved by 38% from last year due to lower SG&A expenses of $69 million versus $1 billion in 1Q2013.
But, the negative impact of the gain on sale of non-operating assets further reduced the adjusted net loss of $1.16 per diluted shares from adjusted net loss of $1.31 per diluted share in 1Q2013.
Liquidity position
During the period, J.C. Penney Company, Inc. (NYSE:JCP) obtained additional borrowings of $2.35 billion to enhance its liquidity position and replace the existing credit facility of $1.85 billion, which is likely to mature by 2016. As of May 3, 2014, JCPenny has solid financial position with the cash balance of $1.2 billion with long term debt of $4.8 billion.
Future outlook
J.C. Penney Company, Inc. (NYSE:JCP) expects to carry the growth momentum in the coming quarters and continue to expand to sustain the profitable growth in the long-term.
Accordingly, JCPenny expects mid-single digit growth in comparable store sales and anticipates improving in gross margin in FY2014. The retailer also expects free cash flow with capital expenditures of ~$250 million and liquidity of ~$2 billion by 2014 end.
