J.C. Penney posts smaller-than-expected loss; shares rise

J.C. Penney posts smaller-than-expected loss; shares rise

FILE PHOTO: Shoppers leave the J.C. Penney department store in North Riverside, Illinois, U.S., November 17, 2017. REUTERS/Kamil Krzaczynski/File Photo

(Reuters) – J.C. Penney Co Inc (JCP.N) posted a smaller-than-expected second-quarter loss on Thursday, as the struggling retailer’s efforts to cut costs and shutter unprofitable businesses paid off.

The department store chain has been one of the worst hit by the surge of online shopping, and has been taking steps to stem its falling sales by reducing inventory at stores to boost margins on merchandise and closing underperforming outlets.

Shares of J.C Penney were up 13% at 65 cents in premarket trading, having fallen 45% this year as of Wednesday’s close.

The company’s net loss narrowed to $48 million, or 15 cents per share in the second quarter ended Aug 3, from $101 million, or 32 cents per share, a year earlier.

Excluding items, J.C. Penney posted a loss of 18 cents per share, smaller than expectations of 31 cents.

Still the company’s sales at stores open for at least 12 months fell 9%. Excluding the impact of the businesses it exited, comparable sales decreased 6%.

Analysts on average were estimating a drop of 5.15%, according to IBES data from Refinitiv.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shinjini Ganguli

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