Should of been a better day today for JCP.. htt

Should of been a better day today for JCP..

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QUARTER RESULTS

Second Quarter Highlights:

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Same store sales increased 6.0 %; third consecutive quarter of growth
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Gross margin improved 640 basis points from same quarter last year and 290 basis points sequentially from the first quarter of 2014
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SG&A improved $62 million; 410 basis point improvement from last year
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EBITDA was $90 million; a $342 million improvement from last year
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Net Income improved 71 % versus same quarter last year
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Free cash flow was $76 million; a $1.2 billion improvement from last year

PLANO, Texas - (Aug. 14, 2014) - J. C. Penney Company, Inc. (NYSE: JCP) today announced financial results for the quarter ended Aug. 2, 2014.

Myron E. (Mike) Ullman, III, Chief Executive Officer, said, "Our turnaround initiatives continue to produce improved financial results. In the second quarter, we gained additional market share while significantly increasing gross margin in a highly competitive promotional environment.”

Ullman continued, “Our customers know they can count on JCPenney to deliver relevant stylish merchandise at a price that fits their budget. With our unique assortment of powerful private brands, key national brands and exclusive attractions - all at prices customers can afford - we expect to continue driving profitable sales this back to school season. As we approach the completion of our turnaround, we are focused on reestablishing JCPenney as the premier shopping destination for the moderate consumer.”

Financial Results

For the second quarter, JCPenney reported net sales of $2.80 billion compared to $2.66 billion in the second quarter of 2013. Same store sales increased 6.0 % for the quarter. Online sales through jcp.com were $249 million for the quarter, up 16.7 % versus the same period last year.

Women’s and Men’s apparel and accessories, Home and Fine Jewelry were the Company's top performing merchandise divisions in the quarter. Sephora inside JCPenney also continued its strong performance. Geographically, all regions delivered



sales gains over the same period last year with the best performance in the southern and western regions of the country.

For the second quarter, gross margin was 36.0 % of sales, compared to 29.6 % in the same quarter last year, representing a 640 basis point improvement. Gross margin improved sequentially throughout the quarter and was positively impacted by improvement in the Company’s clearance sales performance.

Inventory was $2.848 billion, down 9.7 % compared to the same quarter last year. The Company noted it is pleased with the level, content and currency of its inventory.

SG&A expenses for the quarter were down $62 million to $964 million, or 34.4 % of sales, representing a 410 basis point improvement from last year. These savings were primarily driven by lower store expenses, net advertising and corporate overhead as well as improved credit income.

Operating income for the quarter was a loss of $70 million which represents a $325 million or 82 % improvement over last year. EBITDA was $90 million, a $342 million improvement from the same period last year. For the second quarter, the Company incurred a net loss of $172 million or ($0.56) per share. A reconciliation of EBITDA to the most directly comparable GAAP financial measure is included with this release.

Outlook

The Company’s guidance for the third quarter of 2014 is as follows:

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Comparable store sales: expected to increase mid-single digits;
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Gross margin: expected to be in-line with second quarter of 2014; and
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SG&A expenses: expected to be slightly above last year’s levels;

The Company’s updated 2014 full-year guidance is as follows:

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Comparable store sales: expected to increase mid-single digits;
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Gross margin: expected to improve significantly versus 2013;
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Free cash flow: expected to be positive;
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Liquidity: expected to be approximately $2.1 billion at year-end;
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Capital expenditures: expected to be approximately $250 million; and
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Depreciation and amortization: expected to be approximately $640 million.