A brighter future for J.C. Penney?

Plano, Texas -- While it’s way too early to start popping the champagne, J.C. Penney Co. has to be pleased about its second quarter financial results, which topped analysts expectations and suggested that the company’s turnaround is in progress.



The retailer’s better-than-expected performance was driven by higher margins and a double-digit same-store sales increase of its in-store Sephora division, along with the strong results from men's, home and fine jewelry. Penney’s improving picture comes n as the chain has been cutting costs, updating its merchandise assortment, and putting increased emphasis on online sales and omnichannel capabilities.



Here are the highlights of Penney’s second quarter results, which were released only two weeks after former Home Depot executive Marvin Ellison took over the reins as CEO from Myron Ullman:



• Penney’s loss narrowed to $138 million, or 45 cents a share, from $172 million, or 56 cents a share, in the year ago period. Analysts polled by Thomson Reuters had expected a loss of 48 cents a share.



• Total sales rose 2.7% to $2.88 billion from $2.80 billion a year ago, better than analysts’ forecast of $2.86 billion.



•Same-store sales rose 4.1%, also better than expected.



• Gross margin widened to 37% from 36% a year earlier, helped by improvements in clearance and promotions.



For the year, Penney expects earnings before interest, taxes, depreciation and amortization of $620 million, compared with its previous expectation of $600 million. It expects selling, general and administrative expenses to fall by $120 million, a $20 million improvement from its previous forecast.