JC Penney comparable store sales up 4.4 percent in FY14 and Q4

JC Penney Company, for its fiscal fourth quarter and full year ended January 31, 2015 reported comparable store sales growth of 4.4 percent. The combination of this sales improvement, stronger gross margins and decreasing SG&A expense resulted in a 1.1 billion dollars increase in EBITDA for the year.

Commenting on the development, Myron E. (Mike) Ullman, III, Chief Executive Officer, said, “2014 was a successful year for JC Penney. We significantly grew sales and gross margin and delivered on our goal to generate positive free cash flow, representing a 2.8 billion dollars improvement over last year. We fully intend to build on this momentum and continue to significantly improve our business in 2015.”

For the fourth quarter, which included a successful holiday season, JC Penney reported net sales of 3.89 billion dollars compared to 3.78 billion dollars in the fourth quarter of 2013. Online sales through Jcpenney.com were 428 million dollars for the quarter, up 12.5 percent versus the same period last year. Men's apparel, home and fine jewelry were the company's top performing merchandise divisions during the quarter. Sephora inside JC Penney, now in 492 locations, also continued its strong performance. Geographically, all regions delivered sales gains over the same period last year with the best performance in the central and western regions of the country.

For the fourth quarter, gross margin improved 540 basis points to 33.8 percent of sales, compared to 28.4 percent in the same quarter last year. Operating income for the quarter was 63 million dollars, which represents a 201 million dollars increase over last year. EBITDA was 220 million dollars, a 197 million dollars improvement from the same period last year.

For the full year 2014, total sales increased 3.4 percent and Internet sales through Jcpenney.com grew 145 million dollars to 1.22 billion dollars, increasing 13.4 percent over last year. For the year, gross margin increased 540 basis points to 34.8 percent from 29.4 percent in the prior year. SG&A decreased 121 million dollars or 210 basis points compared to the prior year. EBITDA was 323 million dollars, more than 1.1 billion dollars improvement from last year.

In 2014, the company opened its first ever store in Brooklyn, N.Y., giving JC Penney a location in all five boroughs of New York City. The company opened 46 Sephora inside JC Penney boutiques, bringing the total to 492 locations, and announced plans to open 25 additional locations in 2015. In addition, JC Penney, which carries an exclusive assortment of Disney merchandise, is capitalizing on the success of its Disney-branded Shops inside JC Penney by opening an additional 100 locations by back-to-school 2015, bringing the total to nearly 700 locations.

Building on the success of 2014, the company, for FY15 expects comparable store sales to increase 3 percent to 5 percent and gross margin to improve 50 to 100 basis points versus 2014.