For the third fiscal quarter of 2014, gross margin at apparel retailer JC Penney expanded 710 bps over the same quarter of the previous fiscal year.
In the third quarter ending November 1, 2014, gross margin stood at 36.6 per cent of sales, compared to 29.5 % in the same quarter last year, from better product mix and higher margins on clearance sales.
JC Penney was also able to massively cut its operating loss for the 2014 quarter, which amounted to $54 million and which represents a $347 million or 87 per cent improvement over last year.
EBITDA too witnessed a $342 million expansion from the same period last year and amounted to $102 million in the third quarter of 2014.
“EBITDA for the quarter included a gain of $88 million related to the sale of certain store assets,” it said.
JC Penney reported net sales of $2.764 billion for the reporting quarter, down from $2.779 billion in the third quarter of 2013, with same store sales flat for the quarter. (AR)
According to the garment retailer, Home and Fine Jewellery were among its top performing merchandise divisions in the quarter.
“Sephora inside JC Penney also continued its strong performance, while geographically; the western and north-eastern regions of US delivered the best performance,” it added.
Heading into the holiday season, product inventory too fell 10.4 per cent from the prior year quarter to $3.358 billion in the quarter under review.
Driven by lower store expenses and corporate overhead costs, SG&A expenses for the third quarter of 2014 were down $18 million to $988 million or 35.7 per cent of sales.
For the third quarter of 2014, the retailer too steeply reduced its net loss to $188 million or $0.62 per share from $489 million or $1.94 per share in the year ago period.
During the quarter, JC Penney said it completed a $400 million offering of 8.125 per cent senior unsecured notes due 2019 and ended the quarter with over $1.9 billion in total available liquidity.
For the fourth quarter of 2014, JC Penney expects comparable store sales to rise between 2-4 per cent, while gross margin is forecast to increase 500-600 bps from last year.
CEO, Myron Ullman said, “We continued to improve profitability with gross margin expansion of 710 bps, a $342 million improvement in EBITDA and bottom-line financials that exceeded even our own expectations.” (AR)
