Representatives from the Chinese side say they think it likely that Chinese President Xi Jinping will attend the G-20 meeting later this month. But in order to reach a trade...China Economyread more
Software engineers straight out of college often make six-figure salaries, not counting equity compensation.Technologyread more
Wall Street, though, is clamoring for a rate cut, with an 85% chance of a move in July and a 61% probability of three reductions by year's end.The Fedread more
A company spokesperson said the outage was the result of a "an internal technology issue" and was not security related.Retailread more
The flattening of the yield curve is exuding a bad omen for the stock market if history is any guide.Marketsread more
Using MIT's living wage calculator, CNBC Make It mapped out the minimum amount a single parent must earn to meet their basic needs without relying on outside help in every...Earnread more
Hong Kong Chief Executive Carrie Lam announced at a press conference on Saturday that a contentious bill to allow extraditions to mainland China has been put on hold.China Politicsread more
Stratolaunch, the world's largest airplane, which flew once, is up for sale, sources familiar told CNBC.Investing in Spaceread more
Transparency is key… or is it? With the first-ever non-transparent, actively managed exchange-traded fund receiving approval from the SEC, "ETF Edge" goes straight to the...ETF Edgeread more
Mired in a crisis over its best-selling 737 Max plane, Boeing could hand the spotlight over to its rival Airbus at the Paris Air Show.Airlinesread more
A new update to the Apple Watch called watchOS 6 will notify you if the environment you're in is too loud and could damage your hearing.Technologyread more
J.C. Penney finally lifted the lid on its plans to downsize its fleet, telling investors on Friday that it would close between 130 and 140 of its stores over the next few months.
The retailer made its comments while reporting fiscal fourth-quarter earnings that topped Wall Street's expectations, though revenue and same-store sales fell shy of expectations.
The company's shares slipped roughly 9 percent in early trading amid doubts that the store closure plan would be enough to reinvigorate sluggish sales. Fueling that concern was the company's 2017 outlook, which came up short of its previously announced three-year plan.
Here's how Penney's did during the quarter:
— EPS: 64 cents a share, adjusted, versus 61 cents expected, according to Thomson Reuters' consensus
— Revenue: $3.96 billion, versus an expectation of $3.98 billion, according to Reuters
— Same-store sales growth: down 0.7 percent, versus 0.3 percent drop expected, according to FactSet's consensus
In last year's fourth quarter, J.C. Penney reported earnings of 39 cents per share on $4 billion in revenue.
"Although JCP ended its fiscal year with a shrink in sales, it can take some comfort from the fact that the decreases are modest and that it managed to outperform its main department store rivals," said Neil Saunders, managing director of GlobalData Retail, in an email.
Saunders added that the company's bottom line was also encouraging. "In our view, this alone serves as evidence that Marvin Ellison's turnaround plan is delivering and that JCP is finally getting its house in order," he said.
Along with the stores Penney's plans to close, it will shutter two distribution centers. The combined closures will help the retailer invest in its better stores, and "raise the overall brand standard of the company," Ellison said.
The list of impacted stores will be released next month, once sales associates and other staff have been notified. Most of the closures will occur in the second quarter.
"We believe closing stores will allow us to adjust our business to effectively compete against the growing threat of online retailers," Ellison said.
"During the year, it became evident the stores that could fully execute the company's growth initiatives of beauty, home refresh and special sizes generated significantly higher sales, and a more vibrant in-store shopping environment," the CEO said.
The locations Penney's will shutter represent 13 to 14 percent of its store portfolio but generate less than 5 percent of annual sales. They would either require "significant capital" to meet the company's brand standard or are minimally cash flow positive, the company said. Comparable sales in these locations were "significantly below" the remaining store base and operate at a "much higher" expense rate.
The retailer expects to save roughly $200 million a year by closing these stores. It will take a pretax charge of roughly $225 million related to the closures in the first half of fiscal 2017.
Penney's will provide roughly 6,000 employees with a "voluntary early retirement program" for workers of a certain age and tenure. As a result, the company expects a net increase in hiring as the number of full-time employees expected to accept the package will "far exceed" the number of full-time positions affected by the store closures.
Yet even as he announced the company's closures, Ellison reiterated the importance of bricks-and-mortar locations to its long-term strategy.
"Maintaining a large store base gives us a competitive advantage in the evolving retail landscape since our physical stores are a destination," Ellison said. "It is essential to retain those locations that present the best expression of the J.C. Penney brand."
For the year, Penney's achieved its well-publicized goal of reaching $1 billion in EBITDA, marking a $477 million improvement. It was the first time the retailer achieved positive net income since 2010, Ellison said.
Yet revenue fell short in the holiday quarter. Sales at Penney's established stores declined 0.7 percent, and heavier promotions weighed on its margins. The company had previously announced that comparable sales fell 0.8 percent in November and December.
Under Ellison's leadership, J.C. Penney has been making strides in its efforts to recover the sales profitability it lost during a failed turnaround strategy. Since taking the helm in August 2015, the soft-spoken executive has taken expenses out of the business and refreshed the stores' assortment. That includes the company's return to appliances last year and a push into plus sizes.
For fiscal 2017, J.C. Penney expects comparable sales to fall within a range of negative 1 percent to positive 1 percent, and to earn between 40 cents and 65 cents a share, adjusted. Analysts polled by Thomson Reuters were predicting earnings of 56 cents a share for the fiscal year.
Back in August, Ellison laid out a three-year plan for Penney's starting in fiscal 2017. He told investors that compounded annual comparable sales would grow 3 percent, and that earnings per share would hit $1.40 to $1.55 by 2019.
The company also dialed back Friday its conviction that EBITDA would hit $1.2 billion in fiscal 2017, as was previously outlined. While that is "not off the table," the middle point of Penney's outlook projects EBITDA of $1.1 billion, CFO Ed Record said. The retailer would need to generate comparable sales growth slightly north of 2 percent to reach its previously stated goal, Record said.