JCPenney surges 23% after its 3rd-quarter earnings report wasn't as bad as analysts thought it'd be

JCP storeBethany Biron/Business Insider

  • JCPenney reported fiscal third-quarter 2019 earnings on Friday that weren't as bad as Wall Street expected.
  • Shares of the retailer rose as much as 23% on the news in premarket trading Friday.
  • JCPenney is trying to turn itself around after struggling amid a tough retail landscape.
  • Watch JCPenney trade live on Markets Insider.

JCPenney is climbing after its fiscal third-quarter 2019 earnings report Friday showed signs of life in the struggling retailer.

Shares surged as much as 23% in premarket trading Friday after the report. Still, the stock is trading at roughly $1.15 per share.

Here's what the company reported versus what analysts surveyed by Bloomberg expected:
  • Adjusted loss per share: 30 cents reported versus 56 cents (expected)
  • Net sales: $2.38 billion reported versus $2.43 billion (expected)
  • Comparable sales: -9.3% reported versus -8.3% (expected)

The company also reported a net loss of $93 million, or 29 cents per share, narrower than the $151 million loss, or 48 cents per share, from a year earlier.

In addition, the 117-year-old retailer said that it expects adjusted earnings before interest, taxes, depreciation and amortization will be more than $475 million for the full year. That's a step up from the company's previous forecast of between $440 million and $475 million.

"We are beginning to see results - both in our numbers and how we operate as a business," said JCPenney CEO Jill Soltau in a press release.

Soltau took the top spot at JCPenney in October 2018 and has been tasked with turning around the business amid the retail apocalypse, where department stores are struggling to stay afloat.

To turn the business around, JCPenney is making changes to appeal to younger shoppers. It's partnered with thredUP, a resale clothing company, and Pinterest, a social media company. It's also testing new store layouts, including reducing store space and adding cafes and exercise studios to stores.

Still, same-store sales have fallen by multiple percentage points for five quarters straight. In its second-quarter 2019 earnings release, JCPenney reported that same store sales decreased 9%. It also plans to close 27 stores across at least 13 states this year.

JCPenney has a consensus price target of 88 cents, and zero "buy" ratings, seven "hold" ratings, and four "sell" ratings, according to Bloomberg data.

JCPenney is up 12.5% year to date.

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