J.C. Penney Earnings: What to Expect From JCP Stock
J.C. Penney Co. Inc. (NYSE: JCP) stock has struggled once again this year, declining 11 percent year-to-date as the company tries to streamline its business and stay competitive in an evolving U.S. retail environment. Analysts say J.C Penney is on the right track with its cost-cutting strategies, but the company's first-quarter report may be another difficult one for investors.
Analysts expect J.C. Penney to report an earnings-per-share loss of 20 cents in the first quarter and revenue of $2.63 billion. That estimate represents a 2.7 percent revenue decline from a year ago.
Investors will also be watching same-store sales closely. Last quarter J.C. Penny missed the mark by reporting same-store sales growth of just 2.6 percent. The company previously guided for full-year fiscal 2019 same-store sales growth of 0 to 2 percent.
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J.C. Penney management has been combating declining sales and shrinking profits by closing stores, laying off employees and dialing back expenses. The company closed more than 100 stores last year and plans to close eight more in 2018. J.C. Penney has also announced more than 1,000 job cuts so far this year that it says will save the company at least $20 million.
The one potential silver lining to the challenging retail environment is that J.C. Penney competitors are shrinking as well. Sears Holdings Corp. ( SHLD), Macy's ( M) and other mall retailers have also been closing stores, potentially providing an opportunity for J.C. Penney to gain market share over time.
CFRA analyst Efraim Levy is cautiously optimistic that J.C. Penney is getting back on the right track, but he says it's still too early to buy the stock.
"JCP's return to a promotional pricing strategy, a clearer value message in marketing and a focus on bringing its brand assortments closer in line with core customer demand should resonate with its core value-oriented customers," Levy says.
CFRA is expecting J.C. Penney to report an EPS loss of 18 cents, slightly better than consensus forecasts. Levy is anticipating full-year revenue will decline by 2 percent and full-year same-store sales will increase by just 1 percent. CFRA has a full-year fiscal 2019 EPS target of 24 cents.
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CFRA has a "hold" rating and $4 price target for JCP stock.
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