Shares of struggling retail chain J.C. Penney (JCP) - Get Report surged on Thursday after the company reported a narrower-than-expected quarterly loss as it continued its efforts to streamline and restructure its operations amid declining sales.
The Plano, Texas-based company posted an adjusted net loss of $56 million, or 18 cents a share, compared with an adjusted net loss of $120 million, or 38 cents a share, a year earlier. Analysts polled by FactSet had been anticipating a loss of 30 cents a share.
Sales rang in at $2.6 billion, slightly ahead of analysts' forecasts of $2.5 billion. Comparable sales, a key measure in retail, dropped 9% for the quarter. Excluding its exit from major appliances and in-store furniture offerings, comparable sales decreased 6% for the quarter.
Inventory at the end of the second quarter was $2.47 billion, down 12.5% from the second quarter last year.
"I am pleased with the results we delivered this quarter and the progress we are making against our plan," CEO Jill Soltau said in a statement. "While we still have work to do on our top-line, I strongly believe that growing sales in an unprofitable way is simply not an option."
Separately, J.C. Penney said it now expects comparable sales in the range of 7% to 8% and its cost of goods sold as a rate of net to drop by 150 to 200 basis points. The retailer also said it now expects adjusted earnings before income, taxes, depreciation and amortization of between $440 million and $475 million.
Shares of J.C. Penney jumped just over 7% to 61 cents in early trading on Thursday. The department-store chain has six months from the New York Stock Exchange's Aug. 6 date of notification to come back into listing compliance.
The Big Board requires companies to maintain a closing price of at least $1 over any consecutive 30-trading-day period, though it can also work out concessions, as it has with J.C. Penney.