Former Foreign Minister Boris Johnson is seen as the bookmaker's favorite to succeed outgoing Prime Minister Theresa May.Europe Politicsread more
J.P. Morgan economists said they now see a much slower economy in the second quarter, with growth of just 1%.Market Insiderread more
The combination of mounting recession fears, bets on a more cautious Fed and a regular uptick in market volatility could spell more losses, writes Nomura.Marketsread more
An analyst for Ark Invest, which has a major investment in Tesla, says recent drastic price-target cuts by others on Wall Street are missing the big picture.Investingread more
Rep. Chip Roy, R-Texas, has objected to a $19.1 billion disaster relief bill that was expected to pass unanimously Friday. The bill is likely to next be considered when...Politicsread more
If consummated, the deal would mark the latest in a flurry of activity in the payment technology space.Banksread more
The markets have been slow to recognize the high-stakes game that's playing out on the world stage.Economyread more
An altered video of House Speaker Nancy Pelosi made rounds on social media this week, which critics used to attack her mental state.Technologyread more
Stocks were headed for weekly losses on Friday as investors worry the U.S.-China trade war is hurting economic growth.US Marketsread more
One of the biggest Chinese chipmakers is delisting from the New York Stock Exchange amid the trade war, but the company said the decision is not related to the intensifying...Marketsread more
President Donald Trump, his businesses and members of his family on Friday appealed a federal judge's decision that Deutsche Bank and Capital One can turn over years of...Politicsread more
J.C. Penney defied unseasonably warm weather and steep markdowns across the broader retail space to post a 4.1 percent increase in fourth-quarter same-store sales — easily besting its competition.
Beyond winning the all-important holiday sales season, Penney confidently declared to investors that its turnaround has more room to run. While issuing its guidance for 2016, the low-price department store forecast $1 billion in EBITDA, handily topping Wall Street's $901 million expectation.
Meanwhile, Penney's management predicted its adjusted earnings per share would turn positive in the current fiscal year — a feat it hasn't accomplished since 2011.
To get there, the company expects its comparable sales to tick another 3 to 4 percent higher, after rising 4.5 percent in 2015. It also anticipates that sharper price points and an increased penetration of private-label brands will contribute to another slight rise in its gross margin. At the same time, the department store is projecting further cost cutting, as its advertising and technology investments enable its dollars to be more productive.
Penney's shares shot more than 14 percent higher in midday trading Friday, to $9.55.
"J.C. Penney's fourth-quarter numbers stand in marked contrast to the more negative results of many of its department store rivals," said Hakon Helgesen, an analyst at the Conlumino retail research firm. "Most pleasingly, this quarter continues a trend of positives that have seen both total and comparable sales grow across the entire fiscal year."
Despite warmer-than-average temperatures, an overall sluggish consumer spending environment and a round of store closings, Penney during the fourth quarter increased its sales by 2.6 percent.
That boost included comparable gains across all regions, and in men's, women's and kids' apparel. But Penney's strongest-performing categories were home, Sephora, footwear and handbags. What's more, sharper pricing on its clearance items helped the retailer boost its gross margin by 0.3 percent.
Several of the initiatives contributing to Penney's success under the leadership of Marvin Ellison aren't necessarily revolutionary. But the CEO, who officially took the reigns from Mike Ullman in August, openly admits that the company's failed turnaround under Ron Johnson left Penney behind its competitors in such basic capabilities as using data analytics, and generating and fulfilling online sales.
Similarly, the CEO admits that competitors including Macy's and Kohl's do not have a similar tail wind behind their sales, making it significantly easier for Penney to report impressive sales gains. Though Penney grew its revenues 3 percent to $12.6 billion last year, it's still a far cry from the $19.9 billion it raked in eight years ago. Meanwhile, Macy's sales were $27 billion last year, compared to Kohl's $19.2 billion.
"This is why we won in Q4 and why we believe we will win in 2016 and beyond," Ellison told analysts on the company's earnings call.
Looking forward, Ellison and CFO Ed Record said the company should be able to further boost its gross margin through investments that will make its supply chain more efficient, further keying in on the optimal price for merchandise, and expanding upon its private-label brands.
It will also continue rolling out several of its recent store pilots, including buy online, pickup in store; its rebranded InStyle beauty salons; and a more localized assortment for its individual stores.
Still, analysts remain cautious on Penney's long-term turnaround, particularly as it faces ever-tougher comparisons. Though Citi analyst Paul Lejuez acknowledged Penney's momentum during the fourth quarter, he said its big bottom-line beat came as a result of cost savings, "which in our view isn't the highest quality."
"The fiscal year just ended has been one of progress for J.C. Penney," Helgesen said. "That said, the company still has a lot of work to do before it emerges as a modern and profitable operator."