J. C. Penney Company, Inc. (NYSE: JCP) today announced the
following financial results for its fiscal third quarter ended Nov.
2, 2019, as compared to the third quarter ended Nov. 3, 2018 last
year:
- Comparable store sales decreased 9.3 %; Adjusted comparable
store sales decreased 6.6 %
- Cost of goods sold rate improved 350 basis points
- Net loss per share improved over last year to ($0.29)
- Inventory declined 9.0 % to $2.93 billion
- Strong liquidity position of approximately $1.7 billion
- Company increased Adj. EBITDA1 guidance; Reaffirmed all other
prior financial guidance
“The past quarter was an exciting and energizing
time at JCPenney as we made significant progress on our efforts to
return JCPenney to sustainable, profitable growth,” said Jill
Soltau, chief executive officer of JCPenney. “We are beginning to
see results – both in our numbers and how we operate as a business
– from the early implementation of our Plan for Renewal, which is
focused on driving traffic, offering compelling merchandise,
providing an engaging experience, fueling growth, and building a
results-minded culture. Going forward, I am confident that
delivering our strategy, coupled with our ongoing discipline and
commitment to improving the foundational elements of our business,
will return JCPenney to its rightful place in the retail
industry.”
For the quarter ended Nov. 2, 2019, total net
sales decreased 10.1 % to $2.38 billion compared to $2.65 billion
for the quarter ended Nov. 3, 2018. Comparable store sales
decreased 9.3 % for the quarter. Adjusted comparable store sales,
which exclude the impact of the Company’s exit from major appliance
and in-store furniture categories, decreased 6.6 % for the quarter.
Credit income was $116 million for the third quarter this year
compared to $80 million in the third quarter last year.
Cost of goods sold, which excludes depreciation
and amortization, was $1.54 billion, or 64.6 % of sales, in the
third quarter this year compared to $1.81 billion, or 68.1 % of
sales in the same period last year. The 350-basis point improvement
as a rate of sales was primarily driven by an increase in both
store and online selling margins, improved shrink as a percent of
net sales and the exit from the major appliance and in-store
furniture categories earlier this year.
SG&A expenses for the third quarter were
$854 million, or 35.8 % of net sales this year compared to $883
million, or 33.3 % of net sales, last year. The decrease in
SG&A dollars this year was primarily due to lower advertising
and store controllable expenses, which were offset by slightly
higher incentive compensation. Last year, the Company
recorded a $26 million benefit in SG&A expenses in the third
quarter related to the buyout of a store leasehold interest.
Additionally, in connection with the adoption of the new Lease
Accounting Standard at the beginning of fiscal 2019, SG&A
expenses in the third quarter this year included approximately $5
million related to the Company’s home office lease. Last year, the
home office lease related expense was recorded as depreciation and
amortization and interest expense.
For the third quarter, the Company’s net loss
improved from a net loss of $151 million, or ($0.48) per share last
year to a net loss of $93 million, or ($0.29) per share, this
year.
Adjusted net loss was $97 million, or ($0.30)
per share, this year compared to an adjusted net loss of $164
million, or ($0.52) per share, last year.
Cash and cash equivalents at the end of the
third quarter were $157 million. Free cash flow was ($518) million
for the first nine months this year, a decrease of $18 million
compared to the same period last year.
Inventory at the end of the third quarter was
$2.93 billion, down 9.0 % compared to the end of the third quarter
last year. Inventory has declined 13.9% when compared to the end of
the third quarter in fiscal 2017.
The Company ended the third quarter with
liquidity of approximately $1.7 billion. The Company expects
liquidity to be at least $1.5 billion for the remainder of the
year.
A reconciliation of GAAP to non-GAAP financial
measures is included in the schedules accompanying the consolidated
financial statements in this release.
Outlook
The Company is updating its expectation of
Adjusted EBITDA1 to now exceed $475 million for full year fiscal
2019. In addition, the Company has also reaffirmed its prior
financial guidance for full year fiscal 2019 as follows:
- Comparable store sales: expected to be in a range of (7.0) % to
(8.0) %;
- Adjusted comparable store sales, which excludes the impact of
the Company’s exit from major appliances and in-store furniture
categories1: expected to be in a range of (5.0) % to (6.0) %;
- Cost of goods sold, as a rate of net sales: expected to
decrease 150 to 200 basis points compared to last year; and
- Free Cash Flow1: expected to be positive
1 A reconciliation of non-GAAP
forward-looking projections to GAAP financial measures is not
available as the nature or amount of potential adjustments, which
may be significant, cannot be determined now.
2019 Third Quarter Earnings Conference
Call DetailsAt 8:30 a.m. ET today, the Company will host a
live conference call conducted by chief executive officer Jill
Soltau and chief financial officer Bill Wafford. Management will
discuss the Company's performance during the quarter and take
questions from participants. To access the conference call, please
dial (844) 243-9275, or (225) 283-0394 for international callers,
and reference 3173665 conference ID. Visit the Company’s investor
relations website at https://ir.jcpenney.com for conference
call information and supplemental slides that will be released
approximately 10 minutes prior to the start of the call.
Telephone playback will be available for seven
days beginning approximately two hours after the conclusion of the
conference call by dialing (855) 859-2056, or (404) 537-3406 for
international callers, and referencing 3173665 conference ID.
Investors and others should note that we
currently announce material information using SEC filings, press
releases, public conference calls and webcasts. In the future,
we will continue to use these channels to distribute material
information about the Company and may also utilize our website
and/or various social media to communicate important information
about the Company, key personnel, new brands and services, trends,
new marketing campaigns, corporate initiatives and other matters.
Information that we post on our website or on social media channels
could be deemed material; therefore, we encourage investors, the
media, our customers, business partners and others interested in
our Company to review the information we post on our website as
well as the following social media channels:
Facebook (https://www.facebook.com/jcp) and
Twitter (https://twitter.com/jcpnews).
Any updates to the list of social media channels
we may use to communicate material information will be posted on
the Investor Relations page of the Company's website at
www.jcpenney.com.
Media Relations: (972) 431-3400 or
jcpnews@jcp.com; Follow us @jcpnews
Investor Relations: (972) 431-5500 or
jcpinvestorrelations@jcp.com
About JCPenney:J. C. Penney
Company, Inc. (NYSE: JCP), one of the nation’s largest apparel and
home retailers, combines an expansive footprint of approximately
850 stores across the United States and Puerto Rico with a powerful
e-commerce site, jcp.com, to deliver style and value for all
hard-working American families. At every touchpoint, customers will
discover stylish merchandise at incredible value from an extensive
portfolio of private, exclusive and national brands. Reinforcing
this shopping experience is the customer service and warrior spirit
of approximately 95,000 associates across the globe, all driving
toward the Company's mission to help customers find what they love
for less time, money and effort. For additional information, please
visit the website.
Forward-Looking StatementsThis
release may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Words such
as "expect" and similar expressions identify forward-looking
statements, which include, but are not limited to, statements
regarding sales, cost of goods sold, selling, general and
administrative expenses, earnings, cash flows and
liquidity. Forward-looking statements are based only on the
Company's current assumptions and views of future events and
financial performance. They are subject to known and unknown risks
and uncertainties, many of which are outside of the Company's
control that may cause the Company's actual results to be
materially different from planned or expected results. Those risks
and uncertainties include, but are not limited to, general economic
conditions, including inflation, recession, unemployment levels,
consumer confidence and spending patterns, credit availability and
debt levels, changes in store traffic trends, the cost of goods,
more stringent or costly payment terms and/or the decision by a
significant number of vendors not to sell us merchandise on a
timely basis or at all, trade restrictions, the ability to monetize
non-core assets on acceptable terms, the ability to implement our
strategic plan including our omnichannel initiatives, customer
acceptance of our strategies, our ability to attract, motivate and
retain key executives and other associates, the impact of cost
reduction initiatives, our ability to generate or maintain
liquidity, implementation of new systems and platforms, changes in
tariff, freight and shipping rates, changes in the cost of fuel and
other energy and transportation costs, disruptions and congestion
at ports through which we import goods, increases in wage and
benefit costs, competition and retail industry consolidations,
interest rate fluctuations, dollar and other currency valuations,
the impact of weather conditions, risks associated with war, an act
of terrorism or pandemic, the ability of the federal government to
fund and conduct its operations, a systems failure and/or security
breach that results in the theft, transfer or unauthorized
disclosure of customer, employee or Company information, legal and
regulatory proceedings, the Company’s ability to access the debt or
equity markets on favorable terms or at all, and the Company's
ability to comply with the continued listing criteria of the NYSE,
and risks arising from the potential suspension of trading of the
Company's common stock on that exchange. There can be no assurances
that the Company will achieve expected results, and actual results
may be materially less than expectations. Please refer to the
Company's most recent Form 10-Q for a further discussion of risks
and uncertainties. Investors should take such risks into account
and should not rely on forward-looking statements when making
investment decisions. Any forward-looking statement made by us in
this press release is based only on information currently available
to us and speaks only as of the date on which it is made. We do not
undertake to update these forward-looking statements as of any
future date.
###
J. C. PENNEY COMPANY,
INC.SUMMARY OF OPERATING
RESULTS(Unaudited)(Amounts in millions except per share
data)
|
Three Months Ended |
|
|
Nine Months Ended |
|
Statements of
Operations: |
November 2, 2019 |
|
November 3, 2018 |
|
% Inc. (Dec.) |
|
|
November 2, 2019 |
|
November 3, 2018 |
|
% Inc. (Dec.) |
|
Total net sales |
$ |
2,384 |
|
|
$ |
2,653 |
|
|
(10.1 |
)% |
|
|
$ |
7,332 |
|
|
$ |
7,999 |
|
|
(8.3 |
)% |
|
Credit income and other |
116 |
|
|
80 |
|
|
45.0 |
% |
|
|
342 |
|
|
234 |
|
|
46.2 |
% |
|
Total revenues |
$ |
2,500 |
|
|
$ |
2,733 |
|
|
(8.5 |
)% |
|
|
$ |
7,674 |
|
|
$ |
8,233 |
|
|
(6.8 |
)% |
|
Costs and
expenses/(income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold (exclusive of depreciation and amortization
shown separately below) |
1,541 |
|
|
1,808 |
|
|
(14.8 |
)% |
|
|
4,756 |
|
|
5,351 |
|
|
(11.1 |
)% |
|
Selling, general and administrative (SG&A) |
854 |
|
|
883 |
|
|
(3.3 |
)% |
|
|
2,580 |
|
|
2,589 |
|
|
(0.3 |
)% |
|
Depreciation and amortization |
131 |
|
|
138 |
|
|
(5.1 |
)% |
|
|
415 |
|
|
419 |
|
|
(1.0 |
)% |
|
Real estate and other, net |
(1 |
) |
|
(7 |
) |
|
(85.7 |
)% |
|
|
(3 |
) |
|
(13 |
) |
|
(76.9 |
)% |
|
Restructuring and management transition |
9 |
|
|
11 |
|
|
(18.2 |
)% |
|
|
36 |
|
|
20 |
|
|
80.0 |
% |
|
Total costs and expenses |
2,534 |
|
|
2,833 |
|
|
(10.6 |
)% |
|
|
7,784 |
|
|
8,366 |
|
|
(7.0 |
)% |
|
Operating income/(loss) |
(34 |
) |
|
(100 |
) |
|
66.0 |
% |
|
|
(110 |
) |
|
(133 |
) |
|
17.3 |
% |
|
Other components of net periodic pension cost/(income) |
(13 |
) |
|
(19 |
) |
|
(31.6 |
)% |
|
|
(39 |
) |
|
(57 |
) |
|
(31.6 |
)% |
|
(Gain)/loss on extinguishment of debt |
— |
|
|
— |
|
|
— |
% |
|
|
(1 |
) |
|
23 |
|
|
100.0 |
% + |
|
Net interest expense |
73 |
|
|
78 |
|
|
(6.4 |
)% |
|
|
220 |
|
|
235 |
|
|
(6.4 |
)% |
|
Income/(loss) before income taxes |
(94 |
) |
|
(159 |
) |
|
40.9 |
% |
|
|
(290 |
) |
|
(334 |
) |
|
13.2 |
% |
|
Income tax
expense/(benefit) |
(1 |
) |
|
(8 |
) |
|
(87.5 |
)% |
|
|
5 |
|
|
(4 |
) |
|
(100.0 |
)% + |
|
Net income/(loss) |
$ |
(93 |
) |
|
$ |
(151 |
) |
|
38.4 |
% |
|
|
$ |
(295 |
) |
|
$ |
(330 |
) |
|
10.6 |
% |
|
Earnings/(loss) per share -
basic and diluted |
$ |
(0.29 |
) |
|
$ |
(0.48 |
) |
|
39.6 |
% |
|
|
$ |
(0.92 |
) |
|
$ |
(1.05 |
) |
|
12.4 |
% |
|
Financial
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales
increase/(decrease) (1) |
(9.3 |
)% |
|
(5.4 |
)% |
|
|
|
|
(8.0 |
)% |
|
(1.7 |
)% |
|
|
|
Ratios as a percentage of
total net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
64.6 |
% |
|
68.1 |
% |
|
|
|
|
64.9 |
% |
|
66.9 |
% |
|
|
|
SG&A expenses |
35.8 |
% |
|
33.3 |
% |
|
|
|
|
35.2 |
% |
|
32.4 |
% |
|
|
|
Operating income/(loss) |
(1.4 |
)% |
|
(3.8 |
)% |
|
|
|
|
(1.5 |
)% |
|
(1.7 |
)% |
|
|
|
Effective income tax rate |
(1.1 |
)% |
|
(5.0 |
)% |
|
|
|
|
1.7 |
% |
|
(1.2 |
)% |
|
|
|
Common Shares
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and outstanding shares
at end of period |
320.0 |
|
|
315.4 |
|
|
|
|
|
320.0 |
|
|
315.4 |
|
|
|
|
Weighted average shares -
basic |
320.9 |
|
|
316.3 |
|
|
|
|
|
319.3 |
|
|
315.3 |
|
|
|
|
Weighted average shares -
diluted |
320.9 |
|
|
316.3 |
|
|
|
|
|
319.3 |
|
|
315.3 |
|
|
|
|
(1) Comparable store sales include sales
from all stores, including sales from services, that have been open
for 12 consecutive full fiscal months and Internet sales.
Stores closed for an extended period are not included in comparable
store sales calculations, while stores remodeled and minor
expansions not requiring store closure remain in the
calculations. Certain items, such as sales return estimates
and store liquidation sales, are excluded from the Company’s
calculation. Our definition and calculation of comparable store
sales may differ from other companies in the retail industry.
SUMMARY BALANCE
SHEETS(Unaudited)(Amounts in millions)
Summary Balance
Sheets: |
November 2, 2019 |
|
November 3, 2018 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash in banks and in transit |
$ |
147 |
|
|
$ |
157 |
|
Cash short-term investments |
10 |
|
|
11 |
|
Cash and cash equivalents |
157 |
|
|
168 |
|
Merchandise inventory |
2,934 |
|
|
3,223 |
|
Prepaid expenses and other |
285 |
|
|
224 |
|
Total current assets |
3,376 |
|
|
3,615 |
|
Property and equipment,
net |
3,548 |
|
|
4,005 |
|
Operating lease assets |
942 |
|
|
— |
|
Prepaid pension |
175 |
|
|
100 |
|
Other assets |
658 |
|
|
695 |
|
Total
assets |
$ |
8,699 |
|
|
$ |
8,415 |
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Merchandise accounts payable |
$ |
1,105 |
|
|
$ |
1,234 |
|
Other accounts payable and accrued expenses |
899 |
|
|
960 |
|
Current operating lease liabilities |
77 |
|
|
— |
|
Current portion of finance leases and note payable |
1 |
|
|
8 |
|
Current maturities of long-term debt |
147 |
|
|
92 |
|
Total current liabilities |
2,229 |
|
|
2,294 |
|
Noncurrent operating lease
liabilities |
1,112 |
|
|
— |
|
Long-term finance leases and
note payable |
1 |
|
|
206 |
|
Long-term debt |
4,011 |
|
|
4,161 |
|
Deferred taxes |
117 |
|
|
138 |
|
Other liabilities |
361 |
|
|
542 |
|
Total
liabilities |
7,831 |
|
|
7,341 |
|
Stockholders'
equity |
868 |
|
|
1,074 |
|
Total liabilities and
stockholders' equity |
$ |
8,699 |
|
|
$ |
8,415 |
|
SUMMARY STATEMENTS OF CASH
FLOWS(Unaudited)(Amounts in millions)
|
Nine Months Ended |
Statements of Cash
Flows: |
November 2, 2019 |
|
November 3, 2018 |
Cash flows from operating
activities: |
|
|
|
Net income/(loss) |
$ |
(295 |
) |
|
$ |
(330 |
) |
Adjustments to reconcile net income/(loss) to net cash provided
by/(used in) operating activities: |
|
|
|
Restructuring and management transition |
20 |
|
|
(3 |
) |
Asset impairments and other charges |
— |
|
|
53 |
|
Net (gain)/loss on sale of non-operating assets |
(1 |
) |
|
— |
|
Net (gain)/loss on sale of operating assets |
2 |
|
|
(58 |
) |
(Gain)/loss on extinguishment of debt |
(1 |
) |
|
23 |
|
Depreciation and amortization |
415 |
|
|
419 |
|
Benefit plans |
(44 |
) |
|
(56 |
) |
Stock-based compensation |
9 |
|
|
9 |
|
Deferred taxes |
(5 |
) |
|
(9 |
) |
Change in cash from: |
|
|
|
Inventory |
(497 |
) |
|
(420 |
) |
Prepaid expenses and other assets |
(109 |
) |
|
(37 |
) |
Merchandise accounts payable |
258 |
|
|
261 |
|
Income taxes |
3 |
|
|
(2 |
) |
Accrued expenses and other |
(61 |
) |
|
(161 |
) |
Net cash provided by/(used in) operating activities |
(306 |
) |
|
(311 |
) |
Cash flows from investing
activities: |
|
|
|
Capital expenditures |
(226 |
) |
|
(321 |
) |
Proceeds from sale of non-operating assets |
1 |
|
|
— |
|
Proceeds from sale of operating assets |
14 |
|
|
132 |
|
Joint venture return of investment |
— |
|
|
3 |
|
Insurance proceeds received for damage to property and
equipment |
— |
|
|
1 |
|
Net cash provided by/(used in) investing activities |
(211 |
) |
|
(185 |
) |
Cash flows from financing
activities: |
|
|
|
Proceeds from issuance of long-term debt |
— |
|
|
400 |
|
Proceeds from borrowings under the credit facility |
1,827 |
|
|
3,466 |
|
Payments of borrowings under the credit facility |
(1,398 |
) |
|
(3,029 |
) |
Premium on early retirement of long-term debt |
— |
|
|
(20 |
) |
Payments of finance leases and note payable |
(2 |
) |
|
(6 |
) |
Payments of long-term debt |
(86 |
) |
|
(597 |
) |
Financing costs |
— |
|
|
(7 |
) |
Proceeds from stock issued under stock plans |
1 |
|
|
2 |
|
Tax withholding payments for vested restricted stock |
(1 |
) |
|
(3 |
) |
Net cash provided by/(used in) financing activities |
341 |
|
|
206 |
|
Net increase/(decrease) in
cash and cash equivalents |
(176 |
) |
|
(290 |
) |
Cash and cash equivalents at
beginning of period |
333 |
|
|
458 |
|
Cash and cash equivalents at
end of period |
$ |
157 |
|
|
$ |
168 |
|
Reconciliation of Non-GAAP Financial
Measures(Unaudited)(Amounts in millions except per share
data)
We report our financial information in accordance with generally
accepted accounting principles in the United States (GAAP).
However, we present certain financial measures and ratios
identified as non-GAAP under the rules of the Securities and
Exchange Commission (SEC) to assess our results. We believe
the presentation of these non-GAAP financial measures and ratios is
useful in order to better understand our financial performance as
well as to facilitate the comparison of our results to the results
of our peer companies. In addition, management uses these
non-GAAP financial measures and ratios to assess the results of our
operations. It is important to view non-GAAP financial
measures in addition to, rather than as a substitute for, those
measures and ratios prepared in accordance with GAAP. We have
provided reconciliations of the most directly comparable GAAP
measures to our non-GAAP financial measures presented.
The following non-GAAP financial measures are adjusted to
exclude restructuring and management transition charges, other
components of net periodic pension cost/(income), the (gain)/loss
on extinguishment of debt, the net (gain)/loss on the sale of
non-operating assets, the proportional share of net income from our
joint venture formed to develop the excess property adjacent to our
home office facility in Plano, Texas (Home Office Land Joint
Venture) and the tax impact for the allocation of income taxes to
other comprehensive income items related to our pension plans and
interest rate swaps. Unlike other operating expenses,
restructuring and management transition charges, other components
of net periodic pension cost/(income), the (gain)/loss on
extinguishment of debt, the net (gain)/loss on the sale of
non-operating assets, the proportional share of net income from the
Home Office Land Joint Venture and the tax impact for the
allocation of income taxes to other comprehensive income items
related to our pension plans and interest rate swaps are not
directly related to our ongoing core business operations, which
consist of selling merchandise and services to consumers through
our department stores and our website at jcpenney.com.
Further, our non-GAAP adjustments are for non-operating associated
activities such as closed store impairments included in
restructuring and management transition charges and such as joint
venture earnings from the sale of excess land included in the
proportional share of net income from our Home Office Land Joint
Venture. Additionally, other components of net periodic
pension cost/(income) is determined using numerous complex
assumptions about changes in pension assets and liabilities that
are subject to factors beyond our control, such as market
volatility. We believe it is useful for investors to
understand the impact of restructuring and management transition
charges, other components of net periodic pension cost/(income),
the (gain)/loss on extinguishment of debt, the net (gain)/loss on
the sale of non-operating assets, the proportional share of net
income from the Home Office Land Joint Venture and the tax impact
for the allocation of income taxes to other comprehensive income
items related to our pension plans and interest rate swaps on our
financial results and therefore are presenting the following
non-GAAP financial measures: (1) adjusted net income/(loss)
before net interest expense, income tax (benefit)/expense and
depreciation and amortization (adjusted EBITDA); (2) adjusted
net income/(loss); and (3) adjusted earnings/(loss) per
share-diluted.
ADJUSTED EBITDA, NON-GAAP FINANCIAL
MEASURE:
The following table reconciles net income/(loss), the most
directly comparable GAAP measure, to adjusted EBITDA, a non-GAAP
financial measure:
|
Three Months Ended |
|
Nine Months Ended |
|
November 2, 2019 |
|
November 3, 2018 |
|
November 2, 2019 |
|
November 3, 2018 |
Net income/(loss) |
$ |
(93 |
) |
|
$ |
(151 |
) |
|
$ |
(295 |
) |
|
$ |
(330 |
) |
Add: Net interest
expense |
73 |
|
|
78 |
|
|
220 |
|
|
235 |
|
Add: (Gain)/loss on
extinguishment of debt |
— |
|
|
— |
|
|
(1 |
) |
|
23 |
|
Add: Income tax
expense/(benefit) |
(1 |
) |
|
(8 |
) |
|
5 |
|
|
(4 |
) |
Add: Depreciation and
amortization |
131 |
|
|
138 |
|
|
415 |
|
|
419 |
|
Add: Restructuring and
management transition charges |
9 |
|
|
11 |
|
|
36 |
|
|
20 |
|
Add: Other components of
net periodic pension cost/(income) |
(13 |
) |
|
(19 |
) |
|
(39 |
) |
|
(57 |
) |
Less: Net (gain)/loss on
the sale of non-operating assets |
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
Less: Proportional share
of net income from the home office land joint venture |
— |
|
|
(3 |
) |
|
— |
|
|
(4 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
106 |
|
|
$ |
46 |
|
|
$ |
340 |
|
|
$ |
302 |
|
ADJUSTED NET INCOME/(LOSS) AND ADJUSTED EARNINGS/(LOSS)
PER SHARE-DILUTED, NON-GAAP FINANCIAL MEASURES:
The following table reconciles net income/(loss) and
earnings/(loss) per share-diluted, the most directly comparable
GAAP measures, to adjusted net income/(loss) and adjusted
earnings/(loss) per share-diluted, non-GAAP financial measures:
|
Three Months Ended |
|
Nine Months Ended |
|
November 2, 2019 |
|
November 3, 2018 |
|
November 2, 2019 |
|
November 3, 2018 |
Net income/(loss) |
$ |
(93 |
) |
|
$ |
(151 |
) |
|
$ |
(295 |
) |
|
$ |
(330 |
) |
Earnings/(loss) per
share-diluted |
$ |
(0.29 |
) |
|
$ |
(0.48 |
) |
|
$ |
(0.92 |
) |
|
$ |
(1.05 |
) |
|
|
|
|
|
|
|
|
Add: Restructuring and
management transition charges (1) |
9 |
|
|
11 |
|
|
36 |
|
|
20 |
|
Add: Other components of
net periodic pension cost/(income) (1) |
(13 |
) |
|
(19 |
) |
|
(39 |
) |
|
(57 |
) |
Add: (Gain)/loss on
extinguishment of debt (1) |
— |
|
|
— |
|
|
(1 |
) |
|
23 |
|
Less: Net (gain)/loss on
the sale of non-operating assets (1) |
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
Less: Proportional share
of net income from the home office land joint venture (1) |
— |
|
|
(3 |
) |
|
— |
|
|
(4 |
) |
Less: Tax impact
resulting from other comprehensive income allocation (2) |
— |
|
|
(2 |
) |
|
— |
|
|
(5 |
) |
Adjusted net income/(loss)
(non-GAAP) |
$ |
(97 |
) |
|
$ |
(164 |
) |
|
$ |
(300 |
) |
|
$ |
(353 |
) |
Adjusted earnings/(loss) per
share-diluted (non-GAAP) |
$ |
(0.30 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.94 |
) |
|
$ |
(1.12 |
) |
- Reflects no tax effect due to the impact of the Company's tax
valuation allowance.
- Represents the net tax benefit that resulted from our other
comprehensive income allocation between our Operating loss and
Accumulated other comprehensive income.
Reconciliation of Non-GAAP Financial
Measures(Unaudited)(Amounts in millions)
Comparable store sales is a key performance indicator used by
numerous retailers to measure the sales growth of its underlying
operations. Comparable store sales is considered to be a GAAP
measure as the key performance indicator is measured based on GAAP
net sales. Comparable store sales that excludes the impact of
major appliance and in-store furniture categories is considered a
non-GAAP measure. Given our elimination of these categories
from our merchandise assortment, we believe that providing a
comparable store sales metric that excludes the impact of major
appliance and in-store furniture categories is useful for investors
to evaluate the impact of these changes to our sales
performance.
ADJUSTED COMPARABLE STORE SALES INCREASE/(DECREASE),
NON-GAAP FINANCIAL MEASURE:
The following table reconciles comparable store sales
increase/(decrease), the most directly comparable GAAP measure, to
adjusted comparable store sales increase/(decrease), a non-GAAP
measure.
|
Three Months Ended |
|
Nine Months Ended |
|
November 2, 2019 |
|
November 3, 2018 |
|
November 2, 2019 |
|
November 3, 2018 |
Comparable store sales
increase/(decrease) |
(9.3 |
)% |
|
(5.4 |
)% |
|
(8.0 |
)% |
|
(1.7 |
)% |
Impact related to major
appliance and in-store furniture categories |
2.7 |
% |
|
1.4 |
% |
|
2.1 |
% |
|
0.5 |
% |
Adjusted comparable store
sales increase/(decrease) (non-GAAP) |
(6.6 |
)% |
|
(4.0 |
)% |
|
(5.9 |
)% |
|
(1.2 |
)% |
Free cash flow is a key financial measure of our ability to
generate additional cash from operating our business and in
evaluating our financial performance. We define free cash
flow as cash flow from operating activities, less capital
expenditures, plus the proceeds from the sale of operating
assets. Free cash flow is a relevant indicator of our ability
to repay maturing debt, revise our dividend policy or fund other
uses of capital that we believe will enhance stockholder
value. Free cash flow is considered a non-GAAP financial
measure under the rules of the SEC. Free cash flow is limited
and does not represent remaining cash flow available for
discretionary expenditures due to the fact that the measure does
not deduct payments required for debt maturities, payments made for
business acquisitions or required pension contributions, if
any. Therefore, it is important to view free cash flow in
addition to, rather than as a substitute for, our entire statement
of cash flows and those measures prepared in accordance with
GAAP.
FREE CASH FLOW, NON-GAAP FINANCIAL MEASURE:
The following table sets forth a reconciliation of cash flow
from operating activities, the most directly comparable GAAP
measure, to free cash flow, a non-GAAP financial measure, as well
as information regarding net cash provided by/(used in) investing
activities and net cash provided by/(used in) financing
activities:
|
Nine Months Ended |
|
November 2, 2019 |
|
November 3, 2018 |
Net cash provided by/(used in)
operating activities |
$ |
(306 |
) |
|
$ |
(311 |
) |
Add: Proceeds from sale of operating assets |
14 |
|
|
132 |
|
Less: Capital expenditures |
(226 |
) |
|
(321 |
) |
Free cash flow (non-GAAP) |
$ |
(518 |
) |
|
$ |
(500 |
) |
|
|
|
|
Net cash provided by/(used in)
investing activities (1) |
$ |
(211 |
) |
|
$ |
(185 |
) |
Net cash provided by/(used in)
financing activities |
$ |
341 |
|
|
$ |
206 |
|
(1) Net cash provided by/(used in)
investing activities includes capital expenditures and proceeds
from sale of operating assets, which are also included in our
computation of free cash flow.
J C Penney (NYSE:JCP)
Historical Stock Chart
From Aug 2024 to Sep 2024
J C Penney (NYSE:JCP)
Historical Stock Chart
From Sep 2023 to Sep 2024