Dallas -- J.C. Penney topped expectations for the first quarter, reporting a 6.2% increase in same-store sales that easily topped views. Revenue for the quarter, which ended May 3, rose to $2.80 billion, above the $2.71 billion analysts expected, up from $2.64 billion in the year-ago period.
It was the second consecutive month of same-store sales gains for Penney, and the retailer said sales improved sequentially each month within the quarter.
Penney lost $352 million for the quarter, not as much as analysts expected.
“It is clear that our efforts to re-merchandise many areas of the store and revamp our messaging to the customer are taking hold,” said CEO Myron E. (Mike) Ullman, III. “Despite a difficult retail environment, our strong performance during the Easter holiday period and other key promotional events enabled us to deliver better than anticipated sales results. We expect to carry this momentum into the second quarter as we continue to position the company for long-term profitable growth."
Women's and men's apparel, home, and fine jewelry were Penney’s top performing merchandise divisions in the quarter. Geographically, all regions delivered sales gains over the same period last year with the best performance in the western and central regions of the country.
Penney forecast comparable sales in the second quarter to rise in the mid-single digit. It said it expects to end the year with liquidity to be more than $2 billion
Going forward, Penney will simplify its same-store sales calculation to better reflect year-over-year comparability. Certain items, such as sales return estimates and liquidation sales, will now be excluded from the company's same store sales calculation. Under this new methodology, same-store store sales in the first quarter rose 7.4 %, which includes online sales that grew 25.7 % over the same period last year.
Penney also announced on Thursday that it has obtained a fully committed $2.35 billion senior asset-backed credit line to replace its existing $1.85 billion line, which matures in April 2016. Due to favorable market conditions, the company said it decided to pursue the new facility proactively to extend the maturity several years and enhance its liquidity position. This financing is expected to provide better pricing terms and is expected to add $500 million of incremental liquidity during peak seasonal needs.
"With a solid plan in place to complete the turnaround, we are pleased with the support of our banking partners and their confidence in our ability to succeed,” Ullman said.