J C Penney (JCP) Stock: Skyrocketing On Strong Earnings

J C Penney Company Inc (NYSE: JCP) is having an incredibly strong start to the trading session in the pre-market this morning, and for good reason. The company reported earnings for the most recent quarter, beating expectations and exciting investors. Today, we’ll talk about what we saw from the report, how the stock reacted to the news, and what we’ll be watching for with regard to JCP ahead.

What We Saw From JCP Earnings

As mentioned above, J C Penney is having an incredibly strong start to the trading session in the pre-market hours this morning after reporting its earnings for the most recent quarter. Here’s what we saw from the earnings report:

  • Earnings Per Share – In terms of earnings per share, JCP did incredibly well. During the quarter, analysts expected that the company would generate a loss of $0.42 per share. However, the company actually reported a loss of $0.33 per share, blowing away expectations.
  • Revenue – Revenue also proved to be a big hit for the company. During the quarter, JCP reported that it generated revenue in the amount of $2.81 billion. While this figure did fall short on a year over year basis from $2.86 billion, the company beat expectations of $2.78 billion. The year over year revenue decline is being attributed to the closure of 139 stores.
  • Same Store Sales – Finally, in terms of same store sales, J C Penney did overwhelmingy well. During the quarter, analysts expected that the company would see growth in same store sales in the amount of 0.6%. However, the company announced that same store sales came in with growth of 1.7%.

In a statement, Marvin R. Ellison, Chairman and CEO at JCP, had the following to offer:

During the third quarter, we took aggressive actions to clear slow-moving inventory, primarily allowing for an improved apparel assortment heading into the Holiday season. While these actions had a negative short-term impact on profitability in the third quarter, we firmly believe it was the right decision for the Company as we transition into the fourth quarter and fiscal 2018.

We are encouraged that we delivered positive sales comps for the third quarter. Our growth strategies and new apparel initiatives led to sequential comp sales improvement in nearly all merchandise categories in the third quarter, giving us confidence that our overall strategy and transformation is beginning to take hold. While we have more work to do, we remain focused on two critical factors – to operate the business for growth and deliver positive earnings. We’re committed to making the right strategic decisions to ensure we are providing our customers with more reasons to shop and experience JCPenney.”

How The Stock Reacted To The News

As investors, we’ve come to expect that any time a publicly traded company releases positive earnings results, we can expect to see gains in the value of the stock that represents that company. When it comes to J C Penney, that’s exactly what we’re seeing this morning. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:18), JCP is trading at $3.27 per share after a gain of $0.52 per share or 18.91% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on JCP. In particular, we’re interested in following the ongoing story surrounding the company’s turn around as things seem to be going in the right direction. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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