
Here's What J.C. Penney's CEO Said That Made Its Stock Jump
The good weather may be bringing cautious consumers out to buy cheap apparel.
"Sales were positive through Memorial Day," said J.C. Penney (JCP) - Get Report CEO Marvin Ellison during a presentation Wednesday to investors at Piper Jaffray. J.C. Penney shares are currently up over 7% following Ellison's remarks.
A Memorial Day weekend sales rebound follows a challenging first quarter for the company. J.C. Penney's first-quarter same-store sales fell 0.4% compared to estimates for a 3.3% increase. With J.C. Penney rivals such as Macy's (M) - Get Report and Kohl's (KSS) - Get Reportreporting steep sales declines in the quarter, Wall Street singled out J.C. Penney as the winner due to its focus on promoting its affordable private-label brands such as Arizona.
Unfortunately, even J.C. Penney wasn't immune to the tepid consumer interest in buying apparel that weighed on the department store retailers in March and April.
The company lowered its full-year gross profit margin guidance to an increase of 10 to 30 basis points year over year. Previously, the company estimated an increase of 40 basis points to 60 basis points. While J.C. Penney pinned the blame for the downward revision on increasing lower margin appliance and online sales, the market read it as the company will have to be more aggressive with its merchandise prices to lure in consumers.
If the good weather continues to bring in shoppers during the July 4 holiday weekend, J.C. Penney may be on its way to delivering a better-than-expected second quarter.









