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Apparel retailer JC Penney cuts Q2FY16 operating loss
Aug '15
For the second quarter ended August 1, 2015, apparel retailer JC Penney reduced operating loss 46 per cent year over year to $38 million.

In a press release, the retailer said it also improved its EBITDA in the second quarter of fiscal 2016 by $25 million from a fiscal ago period to $115 million.

On an adjusted basis, EBITDA expanded by $95 million to $134 million and also cut its net loss 20 per cent over the prior fiscal to $138 million or $0.45 per share.

The company reported net sales of $2.88 billion in the reporting quarter compared to $2.80 billion in the second quarter of 2014, while same store sales increased 4.1 per cent for the period.

For the quarter, Men's, Home, Sephora and Fine Jewelry were the company's top performing merchandise divisions.

“In particular, Sephora continued its strong performance this quarter with a double digit increase in comparable store sales,” it added.

Geographically, all regions experienced sales growth when compared to the same period last fiscal with the best performance coming from the western and central regions of the US.

For the quarter under review, gross margin improved 100 basis points to 37.0 per cent of sales, driven by improvements in its clearance and promotional selling margins.

SG&A expenses for the reporting period were down $63 million year on year to $901 million or 31.3 per cent of sales, representing a 310 basis point improvement from last year.

According to JC Penney, these savings were primarily driven by lower store controllable costs, advertising and improved private label credit card revenue.

CEO Marvin Ellison said, "We are pleased to report another quarter of improved performance thanks to the commitment and diligence of the JC Penney team.”

“Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates,” he too added.

The company improved its SG&A and EBITDA guidance and reiterated its remaining 2015 full-year guidance.

It expects comparable store sales to rise between 4 and 5 per cent, while gross margin is projected to improve 100 to 150 basis points.

SG&A is now anticipated to decrease approximately $120 million compared to the previous expectation of a $100 million decline.

It now projects EBITDA to amount to around $620 million for the full fiscal as against the prior expectation of $600 million. (AR)

Fibre2Fashion News Desk – India

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