News Column

Ahead of the Bell: Penney soars as shoppers return

May 16, 2014

NEW YORK (AP) Shares of J.C. Penney are surging before Friday's opening bell after it showed increasing signs that customers are coming back to its stores.

On Thursday the Plano, Texas-based company said that sales at stores open at least a year rose 6.2 percent in the period, marking the second straight quarterly gain. The figure, a key indicator of health for retailers, had tumbled 16.6 percent a year earlier.

Oliver Chen of Citi Investment Research said in a client note that better products and marketing seem to be working.

"Revised product is resonating with customers as J.C. Penney has broadly strong performance in women's and men's apparel, home, fine jewelry, women's apparel, casual and career dressing with St. John's Bay, Worthington, and Xersion," he wrote.

The retailer also said it would simplify the way it calculates its sales at stores open at least a year going forward, with sales return estimates and other items no longer being included. Under that new methodology, J.C. Penney said its sales at stores open at least a year rose 7.4 percent in the period.

Penney reported a first-quarter loss of $1.15 per share, but that was better than the loss of $1.25 per share that analysts polled by FactSet expected. Revenue climbed to $2.8 billion, beating Wall Street's estimate of $2.71 billion.

The analyst kept a "Buy" rating and $11 price target.

J.C. Penney's stock jumped $1.43, or 17.1 percent, to $9.80 in premarket trading.

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Source: Associated Press

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