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JC Penney posts third consecutive quarter of growth
Aug '14
In the fiscal second quarter ending August 2, 2014, apparel retailer JC Penney said it reported a third consecutive quarter of growth, while gross margin improved 640 basis points from same quarter last year and 290 basis points sequentially from the first quarter of 2014.

For the second quarter of 2014, NYSE-listed JC Penney posted net sales of $2.80 billion compared to $2.66 billion in the second quarter of 2013.

In the same period, same store sales increased 6.0 percent and online sales stood at $249 million, up 16.7 percent versus the same period last year.

In the quarter under review, JC Penney said, women's and men's apparel and accessories, home and fine jewellery were top performing merchandise divisions.

It added that geographically, all regions delivered sales gains over the same period last year with the best performance in the southern and western regions of USA.

For the second quarter, gross margin clocked 36.0 percent of sales against 29.6 percent 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 its clearance sales performance, JC Penney said.

Inventory was $2.848 billion, down 9.7 percent compared to the same quarter last year.

SG&A expenses for the quarter were down $62 million to $964 million, or 34.4 percent of sales, representing a 410 basis point improvement from last year.

SG&A savings were primarily driven by lower store expenses, net advertising and corporate overhead as well as improved credit income, JC Penney informed.

Operating income for the quarter was a loss of $70 million, down from $325 million or 82 percent from comparable quarter of 2013.

EBITDA stood at $90 million, a $342 million improvement from the same period last year, while it incurred a net loss of $172 million or a negative $0.56 per share in the second quarter of 2014.

For the third fiscal quarter of 2014, JC Penney expects comparable store sales to rise in mid-single digits, while gross margin is expected to be in-line with second quarter of 2014.

Myron Ullman III, CEO 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."

Fibre2fashion News Desk - India

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