J.C. Penney closed its first year of a three-year turnaround Friday with results that beat analyst forecasts, and the retailer offered a positive outlook for 2016.
The department store chain cut expenses and is slowly gaining back some market share. Penney outlined a three-year plan to profitability back in 2014 and is gaining some credibility with Wall Street.
Penney’s fourth-quarter improvements come amid a week of weakness reported by rival department stores Macy’s and Kohl’s. Gap’s results fell short of estimates. Even Nordstrom reported a difficult holiday quarter.
While Penney continues to lose money, here’s the reason Wall Street is happier: Excluding one-time items, Penney reported a profit of 39 cents a share, versus 4 cents a year ago. Analysts surveyed by Thomson Reuters forecast a profit of 23 cents a share and a 2.4 percent sales increase to $3.99 billion.
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Sales increased 2.6 percent to $4 billion, and the key measure of same-store sales increased 4.1 percent.
Penney reported a fourth-quarter net loss of $131 million, or 43 cents a share, versus a loss of $35 million, or 11 cents a share, a year ago. Penney took some expense hits to lower its pension costs and had other restructuring expenses that included a staff cut of 300 people at its home office. It also paid to retire some debt early.
For the year, it cut its losses. Penney reported a net loss of $513 million, or $1.68 a share, in 2015, compared with a loss of $717 million, or $2.35 a share, the prior year.
Categories that Penney has been spending some time fixing — home, footwear and handbags — were top performers in the fourth quarter. Sephora shops, which are inside Penney stores, were also included on that list of top-performing departments.