Ahead of the Bell: JC Penney
Analyst remains optimistic on JC Penney despite disappointing 1st-quarter results
– 14 minutes ago NEW YORK (AP) -- While J.C. Penney Co. posted a bigger-than-expected first-quarter loss, an analyst believes the department store chain's long-term transformation efforts remain on track.
Late Tuesday, J.C. Penney reported a quarterly loss of 75 cents per share, with revenue down 20 percent to $3.15 billion. Its adjusted loss was 25 cents per share. Analysts polled by FactSet expected a loss of 1 cent per share on revenue of $3.45 billion.
The performance disappointed Wall Street, but Citi Investment Research analyst Deborah Weinswig remains optimistic about the Plano, Texas, company.
In February, J.C. Penney announced a plan to get rid of big sales throughout the year in favor of everyday low pricing. Although shoppers seem slow to embrace the strategy, Weinswig maintained in a client note that the retailer's efforts to change the business are still on pace.
She was also pleased that J.C. Penney reaffirmed its full-year guidance for adjusted earnings to meet or beat $2.16 per share. She said the company expects cost savings will pick up through year's end. Its plan to halt its quarterly dividend of 20 cents per share will produce $175 million in annual costs savings, which will be put back into the business to help with its transformation, Weinswig added.
