JC Penney misses Street estimate; stock drops 9%

Remember when JC Penney was cool?

J.C. Penney reported break-even results on Thursday, missing estimates for profit of 11 cents a share, while revenue and comparable-store sales grew more than expected thanks to a "successful holiday season."

The stock fell more than 9 percent in after-hours trading.

The retailer reported fiscal fourth-quarter sales of $3.89 billion, up from $3.78 billion a year earlier, and topping analysts' estimates for $3.87 billion. Same-store sales rose 4.4 percent, compared to forecasts for a gain of 3.8 percent, according to Consensus Metrix. In addition, the company said online sales totaled $428 million, up 12.5 percent.

"I am extremely proud of all that has been accomplished to restore this great company," J.C. Penney CEO Mike Ullman said. "We are back in the eyes of our customers, back running the business effectively and back on solid financial footing. We fully intend to build on this momentum and continue to significantly improve our business in 2015."

J.C. Penney expects comp-store sales to increase between 3 and 5 percent for fiscal 2015, while gross margin is expected to improve between 50 to 100 basis points versus 2014. Free cash flow is projected to come in flat.

"I have been very impressed by what I have seen in my first few months at J.C. Penney," said Marvin Ellison, J.C. Penney president and CEO-designee. "I believe 2015 will be an important year for J.C. Penney, and the team is focused on profitably executing our business."

Last month, J.C. Penney posted strong numbers for the nine-week holiday period, reporting comparable-store-sales growth of 3.7 percent over the year-earlier period.

The improvement renewed investor hope that the struggling retailer's turnaround is on the right track.