JCPenney is back on the path to profitability.
According to Reuters, the department store’s quarterly losses more than halved as JCPenney cut costs and saw higher sales of footwear and home goods in its stores (plus beauty products, thanks to sales at Sephora outlets in its stores).
JCPenney also reaffirmed that it expects to grow by 3, or as much as 4, percent this year, which would be the first time the company has posted a profit in five years, according to Reuters.
“Our regular-price selling was up mid-single digits in July, so we feel really good moving into third quarter,” JCPenney Chief Financial Officer Ed Record said on a conference call to announce the earnings.
JCPenney joins Macy’s and Kohl’s, who also posted better-than-expected earnings for the quarter. To be fair, though, the expectations for all those companies were not very high.
A shift in habits and trends has consumers spending more on big-ticket items and “experiences,” like a new car or a fancy vacation, over apparel, which is mainly what all three of those retailers sell.
Plus, increasing competition from Amazon and other eSellers and off-price chains, like T.J.Maxx or Marshalls, has been further putting a dent in clothing sales of late.
And those trends do not look to be shifting anytime soon. Data released on Friday (Aug. 12) revealed that sales at clothing stores were down 0.5 percent in July, while online clothing sales grew by 1.3 percent during the same month.
JCPenney’s stock reached highs of $10.72 per share in Friday trading, up about 7 percent.