The beleaguered department store chain’s stock surged 15 percent after it reported a bigger-than-expected increase in a key sales metric.
J.C. Penney surprised Wall Street on Friday, but not in the way investors had come to expect: The beleaguered department store chain reported an increase in a key measure of sales that was greater than anticipated, causing its stock to surge.
The retailer said comparable sales — those at stores open at least a year — rose 1.7 percent in the third quarter compared with the same period a year ago, more than double analysts’ expectations and the company’s own forecast last month.
The upswing was J.C. Penney’s first in that critical metric in a year, an indication that the chain’s strategy of purging excess inventory and closing underperforming stores was paying off. The company’s $2.8 billion in revenue for the quarter also exceeded expectations.
J.C. Penney stock rose 15.3 percent to $3.17 on Friday. A year ago, shares were trading above $9.
The J.C. Penney results were a departure from recent earnings reports from retailers that have raised concerns heading into the holiday shopping season. Department stores, in particular, have struggled to recapture foot traffic and to make innovations as they lose sales to Amazon and other online sellers.
Macy’s reported Thursday that its comparable sales for the third quarter had slipped 3.6 percent year over year. Kohl’s reported an uptick in same-store sales, but its quarterly profit missed expectations. Comparable sales at Nordstrom, which were announced Thursday, also underwhelmed.
Not all of J.C. Penney’s earnings picture was positive. The company reported a net loss of $128 million, or 41 cents a share, nearly doubling from $67 million, or 22 cents a share, a year earlier. Adjusting for one-time changes, the retailer lost 33 cents a share, less than analysts had expected.