J.C. Penney Company Inc reported better-than-expected holiday sales late Tuesday, boosting its shares to levels unseen since last November.
The department store operator stated same-store sales increase of 3.7% during the nine weeks of November and December. The strong holiday results also boosted the companys confidence in its quarterly performance.
J.C. Penney said it now expects its fourth-quarter same-store sales growth to be at the upper end of its guidance of 2% to 4%, in comparison, Retail Metrics Analysts estimated 2.7%.
“Our highest priority over the last year has been to restore profitable sales growth at JCPenney. This holiday season was instrumental in that effort – and our teams delivered,” Chief Executive Myron Ullman said in a statement.
J.C. Penney was the first major retailer to announce its performance over the holiday period, which is projected by the National Retail Federation to be the best for the industry since 2011. The group estimated industry sales in November and December to increase by 4.1%.
Analysts have projected stronger holiday period due to the fall in joblessness, plunging oil prices and an overall improving US economy.
According to Daphne Avila, a spokeswoman for J.C. Penney, sales were boosted by increased demand for women shoes, beauty products, jewelry and handbags. Also gift cards were one of the top-selling items at the companys 1 060 stores.
This year J.C. Penney decided to change tactics and disclose exact numbers about its holiday results, in contrast of last year, when the company just said it was “pleased” with its performance. However, investors were doubtful and the companys shares fell.
Additionally last October, J.C. Penny announced it expects lower sales for the third quarter, after a disappointing performance in September. The move spurred concerns among analysts, questioning whether the company could reach its sales target for the year.
However, with the recent results J.C. Penny managed to almost eliminate the 18% decline in share value, which started at the end of November.
On Thursday, retailers Gap, Costco Wholesale, the parent of Victoria’s Secret among others are due to report their Decembers sales.
J.C. Penney Company Inc gained 1.86% on Tuesday and closed at $6.56, marking a one-year decrease of 24.34%. The company is valued at $1.96 billion. In pre-market trading on Wednesday the stock jumped 17.53% to $6.56 at 10:30 GMT.
According to the Financial Times,18 analysts offering 12-month price targets for J.C. Penney Company Inc have a median target of $8.00, with a high estimate of $15.00 and a low estimate of $3.00. The median estimate represents a 21.95% increase from the last close price.
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