JC Penney Shares Jump

JC Penney (JCP) shares jumped Thursday morning as the department-store operator reported a smaller-than-expected loss for its fiscal second quarter on lower markdowns and increased selling margins.

The Plano, Texas-based retailer posted an adjusted per-share loss of $0.18 for the quarter ended Aug. 3, narrower than the $0.38 loss in the prior-year period. Capital IQ’s consensus was for a $0.31 loss. Net sales fell to $2.51 billion, down from $2.76 billion the year before and below the Street’s view for $2.62 billion.

JC Penney’s shares were up more than 10% in early trading.

Comparable-store sales fell 9% from a gain of 0.3% last year. The Street had expected a decline of 5.2%. Excluding the impact of exiting its major appliance and in-store furniture categories, comparable sales fell 6%.

Credit income rose to $110 million from $67 million last year.

“I am pleased with the results we delivered this quarter and the progress we are making against our plan,” said Chief Executive Jill Soltau. “While we still have work to do on our topline, I strongly believe that growing sales in an unprofitable way is simply not an option.”

The company’s cost of goods sold fell more than 13% to $1.59 billion. Soltau said the decline was “driven by lower permanent markdowns, improved shrink results, increased store and online selling margins and the exit of major appliance and in-store furniture categories.”