J.C. Penney Co., the department-store chain in the third year of an attempted turnaround, boosted the low end of its full-year sales forecast, even as growth in the first quarter came in shy of analysts’ estimates.
Comparable-store sales will climb 4 percent to 5 percent this year, compared with a previous projection of 3 percent to 5 percent, the Plano, Texas-based company said on Wednesday. The sales rose 3.4 percent last quarter on that basis, missing the 3.5 percent estimated by analysts.
Chief Executive Officer Mike Ullman has stabilized the company by walking back the costly and ineffective strategies embraced by predecessor Ron Johnson. He’s refocused J.C. Penney on private brands, brought back promotions and ended an expensive renovation program.
“They still have a long, difficult process ahead of them,” said Rick Snyder, an analyst at Maxim Group. “It’s an extremely promotional environment, and there’s a lot of competition out there.”
Though J.C. Penney’s losses have surpassed $3 billion since the start of 2012, the retailer has improved margins and returned to sales growth. Still, the financing of its debt remains a drag on results. The chain borrowed heavily to fund its turnaround and stay afloat, so interest payments have surged. The company posted a loss of 57 cents a share last quarter, excluding some items.
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