Shares of J. C. Penney Co. Inc. rose more than 17% in premarket trading on Aug. 15 after the company reported that adjusted net loss for the second quarter of fiscal 2019 narrowed year over year to $56 million from $120 million.
The department store chain also offered guidance for fiscal 2019 after an earlier decision to withhold its earnings outlook for the full year because of leadership changes within the company.
For the full year, J. C. Penney expects comparable sales to fall 7% to 8% and adjusted EBITDA to range between $440 million and $475 million. Excluding the impact of its halted appliance and in-store furniture businesses, comparable sales are anticipated to decline by 5% to 6%. The retailer also reaffirmed its expectation of positive free cash flow for fiscal 2019.
For the three months to Aug. 3, the department store chain posted adjusted net loss of 18 cents per share, compared to a loss of 38 cents per share in the year-ago period. The S&P Global Market Intelligence consensus normalized loss estimate for the quarter was 31 cents per share.
Total revenues slid 7.4% year over year to $2.62 billion from $2.83 billion, with a comparable sales decline of 9%. Excluding the impact of the company's exit from its major appliance and in-store furniture businesses, comparable sales decreased by 6%.
"Notably this quarter, the meaningful improvement we delivered in cost of goods sold 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," CEO Jill Soltau said in a statement. "Additionally, we reduced inventory by 12.5% as we continue to reinstate the discipline required to improve inventory management and productivity."
Shares in J. C. Penney rose by 17.5%, or 10 cents, to 67 cents in early trading Aug. 15. The retailer reported earnings before U.S. markets opened.