Penny Department Will Turn Off 140 Stores In The 2016 Fiscal Year

According to the world clothing shoes and hats net, J.C.Penney Co.Inc. (NYSE:JCP)

In the 2016 fiscal year, it turned out to be a deficit, even though it recorded a slight profit of $1 million, compared with the net loss of $513 million in fiscal 2015.

Marvin Ellison, the chief executive who successfully led the group for three years, said that the retail market was still challenging in 2016, but the group returned to its profit year. This is the first time that the group has made profits in 6 years.

J.C.PenneyCo.Inc. Penny Department lost 1 billion 388 million US dollars, 771 million US dollars and 513 million US dollars in 2013, 2014 and 2015 respectively. Marvin Ellison joined the group in 2014.

Affected by the news, J.C.Penney Co.Inc. before Penny's stock price rose sharply, the deadline for publication time 6:53AM increased 3.64% to 7.11 U.S. dollars.

As of the fourth quarter of 2016 fiscal year January 28, 2017, J.C.Penney Co.Inc. Penny's same store recorded a 0.7% decline, worse than FactSet's expected 0.3% decline and Consensus Metrix's 0.5% decline.

Fourth quarter group group recorded a net profit of $192 million, or $0.61 per share, compared with a net loss of $131 million in the same period last year, plus a loss of $0.43 per share.

The adjusted EPS for the four quarter was $0.64, which was better than that of Thomson Reuters and Zacks, which were expected to be US $0.61.

During the period, the group's income was $3 billion 961 million, a decrease of 0.9% over the same period in the 2015 fiscal year of 3 billion 996 million, slightly less than that of Thomson Reuters's expected $3 billion 980 million, and Zacks expected to be $3 billion 970 million.

J.C.Penney Co.Inc. said on Friday that the group will close 130-140 stores in the coming months. In addition to the above operations, Marvin Ellison said the group will close two distribution centers to help companies invest in better stores and raise store standards.

For the closed shop plan, J.C.Penney Co.Inc. Penny department also made a separate statement on the earnings announcement on Friday. Marvin Ellison said the company had launched an early retirement scheme for 6000 people, but these measures will help the group effectively resist the threat of the increasingly powerful online retailers and help the group continue to deepen its work in various channels.

He also said that the 2016 group

Business has double-digit growth, 75% of which are shipped from physical stores, which greatly reduces logistics costs.

The 130-140 stores to be closed account for about 13-14% of the group's stores, but sales account for only 5%, accounting for less than 2% of the group's EBITDA core profit, and the overall loss.

Therefore, closing the store actually helps the group to increase efficiency and return rate, saving $200 million per year for the group.

As of the four quarter of January 28th, J.C.Penney Co.Inc. Penny's Department recorded a gross margin of 33.1%, a year-on-year decline of 100 basis points, mainly due to promotion.

Sephora, silver, salon services and premium jewelry business; SG&A has a 23.4% premium rate, a year-on-year improvement of 70 basis points, and a 6.9% increase in operating profit period by 740 basis points.

In 2016, J.C.Penney Co.Inc. Penny Department recorded $12 billion 547 million in revenue, a decrease of 0.6% compared with $12 billion 625 million in 2015, and a gross profit margin of $4 billion 476 million, a 1.6% decrease in 2015 compared with $4 billion 551 million in 2015.

J.C.Penney Co.Inc. Penny Department expects the current sales growth of -1-1% in the 2017 fiscal year -1-1%, the gross profit margin is expected to improve by 20-40 basis points, adjusted earnings per share of $0.40-0.50 per share.

On Thursday, J.C.Penney Co.Inc. Penny's stock price closed at $6.86, down 2.70%, which has fallen 17% this year, down 9% in December.

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