J.C. Penney expects higher sales, gross profit this year
By Phil Wahba
(Reuters) - After two years of massive losses, J.C. Penney Co Inc (JCP.N: Quote) appears to be turning a corner.
It reported improved sales and profit margins for the holiday season quarter, and the department store chain expects to make further strides this year.
Penney forecast that comparable sales, which include e-commerce and revenue at stores open at least a year, will be up by a "mid-single digit" percentage for this fiscal year, and it expects "significant" gains in its gross profit margin.
Shares were up 16.1 percent to 6.92 in afterhours trading, on top of a 5.7 percent increase the regular session.
The stock, still well below its $21.70 price of a year ago, has been under pressure for months on Wall Street speculation that slow sales growth would force the debt-laden company to try to raise more money after doing so three times in 2013.
But the retailer quelled those concerns when it said it expected to have $2 billion in cash and lending capacity at year-end, the same level as at the start.
"The 2014 liquidity guidance implies that the business can self-fund," said William Frohnhoefer, an analyst with BTIG.
Penney is trying to win back more shoppers after it tried unsuccessfully in 2012 to go upmarket and alienated many long-time customers, leading to a 30 percent sales decline over two years. Continued...