J.C. Penney rips higher after Q1 beat and promising credit terms

J.C. Penney (JCP) reports same-store sales increased 6.2% in Q1 as the retailer ran up against a soft comp.

The retailer said it improved sequentially during the month and boosted its gross margin rate by 230 bps to 33.1%.

On the cost side, things got really interesting for the company. SG&A expenses alone were down $69M.

J.C. Penney has a new "fully committed and underwritten" $2.35B secured ABL credit facility which buys it some more breathing room with the maturity now extended.

Q2 Guidance: Comp growth mid-single digits; gross margin improvement vs. LY; S&G expenses lower; depreciation and amortization of $155M.

JCP +19.9% AH.

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Comments (6)
  • MatthewDoyle
    , contributor
    Comments (11) | Send Message
    lol. I bought a call option @ $9.50 five minutes before the closing bell. Did not expect it to go a dollar further!
    15 May 2014, 05:14 PM Reply Like
  • King Rat
    , contributor
    Comments (1902) | Send Message
    Operating loss "under" 1/4 $billion this quarter? An improvement, I guess. I hope JCP can pull it off but I wouldn't want to be long right now. At least they are not Sears.
    15 May 2014, 05:16 PM Reply Like
  • User 15536532
    , contributor
    Comments (96) | Send Message
    Surprised they are rallying on another billion plus loss... Same store sales improve versus "soft" comp and they added additional debt to this debt machine. Wow!


    I am still short. Today might hurt but still confident it eventually goes below $3. Congrats longs. You had guts to hold it this far.
    15 May 2014, 05:40 PM Reply Like
  • Fast Lane
    , contributor
    Comments (900) | Send Message
    we are you getting those numbers, loss was $342m.
    $1,500M cash on hand
    New credit line $2,350M
    25% increase in internet sales
    33.1 gross margin
    6.2% SSS increase


    Positive Cash flow before YE
    15 May 2014, 09:31 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (4402) | Send Message
    A short squeeze is possible tomorrow (over 30% of the float is short). However, I still think the better way to play JC Penny is via there preferred, KTP. I'd rather bet that JCP somehow finds a way to continue to survive and get paid 10% to hold through all the turmoil. Remember the malls take huge hits when a JC Penny closes, not just for the anchor store but also they other stores around it. They therefore should be pretty willing to negotiate rent. And JCP doesn't have to appeal to everyone to survive. They could transform themselves into a large specialty store (e.g. all salespeople Spanish speaking, etc.).
    15 May 2014, 06:14 PM Reply Like
  • Alphadogspartan
    , contributor
    Comments (225) | Send Message
    Telsey Advisory Group reiterated a “” rating on shares of J.C. Penney Company with a $15.00 price target on the stock
    Analysts at Telsey Advisory Group reiterated a “” rating on shares of J.C. Penney Company in a research note on Monday, March 31st.
    15 May 2014, 08:10 PM Reply Like
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