JCPenney (JCP) is scheduled to announce its fiscal 2018 fourth-quarter[1.ended February 2] results on February 28. The company’s performance disappointed investors in fiscal 2018’s first three quarters, and JCPenney withdrew its previous earnings guidance after announcing its fiscal 2018 third-quarter results in November. The mid-tier department store chain felt that its newly appointed CEO and interim CFO needed more time to assess the company’s situation and decide on a course of action.
Analysts expect JCPenney’s adjusted EPS to fall 80.7% YoY (year-over-year) to $0.11 in fiscal 2018’s fourth quarter. Weak sales and higher expenses are expected to impact the company’s bottom line.
Recapping JCPenney’s previous performance
JCPenney reported losses in each of the first three quarters of fiscal 2018. In the third quarter, its adjusted loss per share widened YoY to $0.52 from a loss of $0.35 due to lower sales and deleveraged expenses. Its gross margin narrowed YoY to 31.9% from 34.0% as the company marked down slow-moving inventory, and its operating margin deteriorated YoY to -3.8% from -2.8% due to higher store-controllable costs and marketing expenses.
In fiscal 2018, analysts expect JCPenney’s adjusted EPS to fall YoY to -$1.00 from $0.22. In January, JCPenney reaffirmed that it expects positive free cash flow in fiscal 2018. Next, we’ll discuss JCPenney’s revenue expectations.