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JC Penney reports net sales of $2.7 bn in Q1 2017
May '17
JC Penney has reported net sales of $2.7 billion in the first quarter of 2017 that ended April 29, compared to $2.8 billion last year. For the first quarter, gross margin was 36.3 per cent of sales, an increase of 10 basis points compared to the first quarter last year. Gross margin was positively impacted by improved selling margins throughout the quarter.

SG&A expenses for the Q1 2017 declined $29 million to $843 million, or 31.2 per cent of sales. These savings were primarily driven by lower marketing, store controllable costs and incentive compensation.

For the first quarter, the company's net loss was $180 million, or ($0.58) per share, which includes $220 million, or approximately ($0.71) per share, of restructuring charges associated with store closing announcement and voluntary early retirement program; $17 million, or approximately $0.06 per share, of benefit from the tax impact from other comprehensive income allocation and $4 million, or approximately $0.01 per share, of benefit from primary pension plans among other things.

EBITDA was $40 million for the first quarter 2017 compared to $176 million for the same period last year. Adjusted EBITDA for the quarter improved $102 million or 67 per cent to $255 million compared to the first quarter last year.

Inventory at the end of the first quarter 2017 was $2.95 billion, an increase of 0.8 per cent compared to the end of the first quarter last year.

The company completed the sale of its Buena Park distribution facility in March for a net sales price of approximately $131 million and recorded a net gain of approximately $111 million in the first quarter associated with the sale of this facility.

Cash and cash equivalents at the end of the first quarter were $363 million. During the quarter, the company utilised available cash on hand to retire $220 million of outstanding bonds that matured in April. The company ended the quarter with a liquidity position of approximately $2.4 billion.

"We continue to make encouraging progress in the Company's competitive and financial position despite our top-line performance during the first quarter. While February was a very challenging month for JCPenney and broader retail, we are pleased with our comp store sales for the combined March and April period, which improved significantly versus February.  The recent sales trends, combined with the improvement in women's apparel and our growth initiatives led by Sephora inside JCPenney, jcp.com and major appliances, provide us with the confidence to maintain our sales guidance for the full year," said Marvin R Ellison, chairman and chief executive officer, JC Penney. (KD)

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