DALLAS _ Plano, Texas-based J.C. Penney narrowed its quarterly loss and raised its outlook for operating earnings, but sales continue to decline.
"This organization has a lot of problems to fix," CEO Jill Soltau said during a conference call with analysts, but she said she remains confident of the team she's put together. The company "made significant progress on our efforts to return J.C. Penney to sustainable, profitable growth."
Penney posted a third quarter loss of $93 million, or 29 cents a share, in the three months ended Nov. 2, compared with a loss of $151 million, or 48 cents a share, a year ago.
Penney's stock price was higher in the pre-market.
Penney's sales decreased 10.1% to $2.38 billion. Same-store sales declined 9.3% from the third quarter last year. Adjusted same-store sales declined 6.6% and exclude the impact of Penney's decision to exit the furniture and appliance business last year.
Analysts surveyed by Refinitiv forecast a loss of 56 cents a share and a sales decline of 7.7%.
Soltau's plan for renewing J.C. Penney and bringing it, as she says, "to its rightful place in the retail industry" has five-points: "to focus on driving traffic, offering compelling merchandise, providing an engaging experience, fueling growth, and building a results-minded culture."
Margins were up in all categories and free cash flow will be positive for the full year, said chief financial officer Bill Wafford. The company raised its full year earnings before interest, taxes and other items to more than $475 million, which was the high end of its previous range.
So far this year, Penney has paid off $150 million of its long term debt to $4 billion and interest expense was $73 million in the quarter. Penney has a $105 million note due next year. Its next big debt moment is in 2023 when it will have to refinance its $2.06 billion term loan.
