J.C. Penney (OTC:JCPN.Q) released a holiday sales statement last month that lacked any data -- and shares closed down 10% that day. The company has finally released some preliminary information ahead of the fourth-quarter report expected on Feb. 26, however. The holiday quarter produced mixed results from Sears Holdings (NASDAQ:SHLDQ), Macy's (NYSE:M), and other competitors. How did J.C. Penney fare?
Comparable store sales at J.C. Penney were up 3.1% year over year during the nine weeks covering November and December. The data suggests that customers continue to trickle back to Penney's after running from Ron Johnson's attempted transformation. Returned CEO Myron Ullman has worked to move out unwanted inventory while restocking popular private brands. J.C. Penney recently announced cost-saving job cuts and a poison pill extension to help the company's transition.
How did J.C. Penney's holiday sales match up to the competition?
First quarterly comps growth in two years
Comps for J.C. Penney's entire fourth quarter were up about 2% and marked the first quarterly comps increase in more than two years. Sales for the fourth quarter were up about 26% compared to the prior year's quarter, which had reported revenue of $3.9 billion.
J.C. Penney's comps growths came during a fiercely competitive holiday season that was further complicated by inclement weather. Sears was one of the biggest losers with a comps drop of more than 9% at its namesake stores and nearly 6% at Kmart stores during the nine-week period ending Jan. 4. The company expects to report a loss per share of $2.35-$3.39 for the full quarter, which will report the day after J.C. Penney.
The new holiday data puts J.C. Penney's holiday performance closer to the figures Macy's reported, which included comps growth of 3.6% during November and December. Macy's announced its own job cuts with the comps announcement. More data will become available when Macy's reports, the day before J.C. Penney.
Earnings reports: What to expect
J.C. Penney, Sears, and Macy's all report in the same week, which makes for convenient comparisons. Analysts expect J.C. Penney to report revenue of $3.9 billion and net loss of $0.78 per share. The store's data suggests a revenue beat, but EPS might suffer a worse fate as J.C. Penney has missed estimates for the past five quarters.
The analyst consensus estimates for Sears include revenue of $10.8 billion and a loss per share of $1.56. Sears will likely miss on both estimates. Macy's will have a better chance at beating the estimates of $9.28 billion in revenue and EPS of $2.17.
Foolish final thoughts
The preliminary data looks promising and I'm mystified as to why J.C. Penney didn't release the numbers last month. The data is incomplete, however, so the fourth-quarter report later this month could still hide the devil in the details. On the plus side, J.C. Penney can at least toast to the fact that it isn't Sears.