JCPenney switching gears to growth mode

JCPenney Company cited strong financial results in the first quarter as the impetus for going on the offensive to gain back share and becoming the “preferred shopping choice for Middle America.”

JCPenney reported net sales of $2.86 billion compared to $2.80 billion in the first quarter of 2014. Same store sales increased 3.4% for the period.

The company has made inroads in recent quarters on its turnaround, and the company may finally be making progress on reconnecting with its core customers.

Myron E. Ullman, chief executive officer, said: "We are pleased with the company's solid performance this quarter across all key metrics including sales, gross margin and EBITDA. This year we are switching gears, going on the offensive to gain back share and grow our business profitably while executing our vision to become the preferred shopping choice for Middle America. I would like to thank our team of 114,000 associates for their hard work and warrior spirit that helped us deliver these results. It is their passion to win and to serve the customer that sets JCPenney apart from the competition."

For the quarter, the company said women's apparel, men's and home were the company's top performing merchandise divisions. Sephora inside JCPenney, which is now available in 515 locations, also continued its strong performance, the company said. The company incurred a net loss of $167 million or 55 cents per share, a 52% improvement.

Marvin Ellison, president and CEO-designee, said: "The teams executed extremely well this quarter, resulting in significantly improved performance across the enterprise. It is clear that our strategic initiatives are working to drive profitable sales growth. Our exceptional customer experience, when combined with our strength in private brands, national brands and points of differentiation like Sephora inside JCPenney and the Disney Collection, give us confidence in our ability to earn customer loyalty and deliver on our long term goals. In fact, based on our results to date, including a strong Easter and Mother's Day, we feel confident in raising our 2015 expectations for sales, gross margin and SG&A."

Looking ahead to 2015, the company expects same store sales to increase 4% to 5% versus 3% to 5% previously. It expects gross margin to improve 100 to 150 basis points up from 50 to 100 basis points previously. And it expects EBITDA of approximately $600 million.

JCPenney operates approximately 1,020 stores and jcpenney.com.