J.C. Penney said Thursday morning it had a stronger holiday season than last because it was bolstered by sales in home, beauty and fine jewelry.
It also benefited from a stronger shopping season across the board.
The department store chain reported a jump in same-store sales of more than 3 percent during November and December compared with a year ago.
“We are very encouraged with our overall comp sales performance during the holiday season,” CEO Marvin Ellison said in a statement.
Penney’s stock initially spiked higher in premarket trading on the news, but was down 4 percent at midday. Shares had been rallying in expectation of positive holiday sales figures.
For many retailers, results this holiday season have been stronger than in 2016 after a bounce from greater consumer confidence and a booming stock market. Still, with a tougher holiday season last year, the bar was lower this time. J.C. Penney last year saw comparable sales fall 0.8 percent.
Part of Penney’s challenges have been its weakening apparel business, which it has sought to counter by focusing on areas like appliances and makeup. The latter is bolstered from its partnership with Sephora.
J.C. Penney, like many retailers, struggled to keep up with quickening shopping expectations that fast fashion has created. In October, it saw shares drop to an all-time low when it slashed 2017 profit and comparable-sales forecasts because it had to slice prices of unsold women’s apparel. A month later, it got rid of the chief merchandising officer position all together. The retailer said this holiday season its apparel categories, particularly women’s and kids, continued to improve.
“The Nov. and Dec. trend doesn’t change our overall thesis, as we believe the mall-based dept. store sector is challenged with structural issues,” Jefferies analyst Randal Konik wrote in a note to clients. “JCP is taking necessary steps to effectuate its turnaround and is seeing some traction with its various initiatives, but we remain cautious given a challenged dept. store environment and risks involved in a retail turnaround.”
The department store chain also on Thursday reaffirmed its fiscal 2017 outlook, which was lowered earlier this year because of the need for more discounting and getting rid of excess inventory across stores.
The retailer expects full-year same-store sales, a key metric monitored by investors, to be flat at best, and adjusted earnings are projected to fall within a range of 2 to 8 cents per share.
The company added that its e-commerce business posted double-digit sales growth during the holiday season, fueled by sales in categories including jewelry, home furnishings, toys and athletic footwear.
“Our ability to execute e-commerce fulfillment from 100% of our brick and mortar stores helped fuel the growth in e-commerce for the holiday season,” Ellison said.
The department store chain will report fourth-quarter and full-year earnings on March 2.