J.C. Penney 3Q13 Conference Call Summary

J.C. Penney Company, Inc.JCP

had their third quarter 2013 Earnings Conference Call this morning. CEO Mike Ullman began the call saying, "Let me start off by saying that the turnaround at JCPenney is beginning to take hold. We're making significant strides toward restoring JCPenney to its rightful place in retail. The work we've been doing over the last seven months to stabilize the business financially and operationally, required fundamental changes in many aspects of our business. It's hard work with no quick fixes, but our teams are rising to the challenge and our customers tell us they love the progress we're making. I'm pleased to report that during the third quarter, we began generating positive sales momentum, which has enabled us to get off to an encouraging start in the fourth quarter. Earnings Summary:

J.C. Penney posted a quarterly loss of $489 million, or $1.94 per share. Last year, the company reported a loss of $123 million, or $0.56 per share.
Sales fell 5.1% to $2.78 billion from $2.93 billion. Analysts were expecting a loss of $1.74 per share on sales of $2.8 billion.
Gross margin for the third quarter was reported of 29.5% of sales, compare to 32.5% during 3Q12.
Comparable sales declined 4.8% in the quarter versus analysts' expectations of 4.7%.
SG&A expenses were $1.006 billion for the quarter, down $81 million in 3Q12. Net SG&A savings over the last several quarters totaled over $800 million.
Year end inventory levels are expected to be $2.850 billion.
Total available liquidity is $1.71 billion. The company expects to end the year with over $2 billion.
Capital expenditures for the fourth quarter are expected to be approximately $175 million.
Capital expenditures in fiscal 2014 are estimated to be approximately $300 million.

Important Notes From The Call:

As the weather cooled down, women's apparel, men's apparel, and fine jewelry led top performers in the quarter.
Men's apparel, children's apparel, and home were the top performers online in the third quarter.
Mike Ullman saw strength in specific brands and in the Home category. Ullman commented, "Our private brands such as Worthington, St. John's Bay, and important national brands such as IZOD, Vanity Fair, Carter's and others were strong sellers in both stores and online. Our Home category such as bedding, bath, window covering and housewares were also strong in the quarter."
Ullman further noted, "We're very happy with our inventory level and the composition of the inventory."

JCP closed at $8.71 and is currently up 7.35%

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J.C. Penney 3Q13 Conference Call Summary