For the first fiscal quarter ended May 2, 2015 gross margin at US apparel retailer JC Penney expanded 330 basis points to 36.4 per cent of sales, compared to 33.1 per cent in the same quarter of last fiscal.
JC Penney reported net sales of $2.86 billion in first quarter of fiscal 2016, up 2.14 per cent from the earlier fiscal first quarter, while same store sales increased 3.4 per cent for the period.
According to a JC Penney press release, women's apparel, men's and home were its top performing merchandise divisions in the quarter.
“Sephora inside JCPenney, which is now available in 515 locations, also continued its strong performance,” the clothing retailer added.
Geographically, all regions experienced sales growth when compared to the same period last year with the best performance in the western and central regions of the US.
SG&A expenses for the reporting quarter were down $44 million to $965 million or 33.8 per cent of sales, representing a 220 basis point improvement from last fiscal’s first quarter.
“These savings were primarily driven by lower store controllable costs, advertising and improved credit income,” it observed.
Operating income for the first quarter of fiscal 2016 improved 70 per cent over the first quarter of fiscal 2015 to a loss of $75 million.
EBITDA improved by $168 million to $79 million, a 600 basis point or 189 per cent expansion from the same period last fiscal.
For the quarter under review, JC Penney incurred a net loss of $167 million or loss of $0.55 per share, a 52 per cent year on year improvement.
For fiscal 2016, the retailer now expects comparable store sales to increase between 4 to 5 per cent versus 3 to 5 per cent announced earlier.
It has now forecast gross margin to improve to between 100 and 150 basis points up from 50 and 100 basis points, it had announced previously.
JC Penney said it projects depreciation and amortisation at around $615 million, interest expense of approximately $415 million and capital expenditures of between $250 and $300 million for fiscal 2016.
CEO Myron Ullman said, "This year we are switching gears, going on the offensive to gain back share and grow our business profitably while executing our vision to become the preferred shopping choice.”
CEO-designate Marvin Ellison said, "The teams executed extremely well this quarter, resulting in significantly improved performance across the enterprise.”
“Based on our results to date, including a strong Easter and Mother's Day, we feel confident in raising our fiscal 2016 expectations for sales, gross margin and SG&A," Ellison too added.
