Over the past few years, J.C. Penney (NYSE:JCP) has made a lot of moves to ensure its long-term survival. It has dramatically shifted its merchandise, added a toy department in all its stores, added appliances to many, and built out multiple store-within-a-store concepts.
So far, however, at least until recently, the results have been mixed. There have been signs the company has turned a corner and others that it has not. During the 2017 holiday season, that appears to have changed.
In 2016, J.C. Penney saw its momentum crushed when its holiday season failed to meet expectations. That did not happen in 2017 as the company reported a 3.4% increase in comparable-store sales for the nine-week period ending on Dec. 30 versus the same period in 2016. In addition, the retailer reaffirmed all components of its most recent full-year financial guidance for fiscal 2017 in an early January preview of its Q4 earnings release.
"We are very encouraged with our overall comp sales performance during the holiday season, which was led by home, beauty and fine jewelry," said CEO Marvin R. Ellison in the earnings press release. "Additionally, our apparel categories continue to demonstrate improved comp performance, particularly in women's and kids."
The positive holiday news sent shares in the company moving in the right direction. After closing January at $3.71, they climbed to $4.33, a 16% change, according to data provided by S&P Global Market Intelligence.
Investors are likely happy that J.C. Penney has been able to do something other struggling retailers have not achieved by posting positive same-store sales numbers. That, of course, is only one metric of success, but during the holiday season, it's a telling one.
A lot of good things happened for J.C. Penney in Q4, but its earnings per share still dropped from $0.64 last year to $0.57 in 2017. Going forward, the company has to show that it can keep up its sales volume while also growing its profits. The holiday season makes it appear that its comeback efforts have taken hold, but it's going to have to show consistent success to go from "turning around" to "turned around."