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Will JCPenney’s Earnings Continue to Improve in Fiscal 4Q16?


Feb. 22 2017, Updated 10:37 a.m. ET

Consistent improvement

JCPenney (JCP) has been able to trim down its losses in each of the first three quarters of fiscal 2016 despite pressure on its top line. Improvement has been a result of the company’s turnaround efforts and efficiency measures.

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Bottom line in 3Q16

In fiscal 3Q16, which ended on October 29, 2016, JCPenney posted an adjusted loss per share of $0.21, which was in line with analysts’ consensus estimate. It was an improvement over an adjusted loss per share of $0.46 in fiscal 3Q15.

Despite a fall in sales, improvement in adjusted EPS (earnings per share) for fiscal 3Q16 was a result of lower selling, general, and administrative expenses. The company delivered savings through lower corporate overhead, incentive compensation, and store controllable costs.

Earnings expectations

Despite reporting lower 2016 holiday sales on January 6, 2017, JCPenney reaffirmed its EBITDA (earnings before interest, tax, depreciation, and amortization) target of $1.0 billion for fiscal 2016.

For fiscal 4Q16, analysts expect the company to deliver adjusted EPS of $0.61 compared to $0.39 in fiscal 4Q15. For fiscal 2016, they expect the company to post adjusted EPS of $0.03 compared to -$1.03 in fiscal 2015.

Analysts expect JCPenney’s peers Nordstrom (JWN) and Kohl’s (KSS) to fall 1.7% and 16.1%, respectively, for their fiscal 4Q16 adjusted EPS.

Now let’s see what analysts are recommending for JCPenney stock.


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