Comparable sales increased 2.6% in the fourth quarter and were on the same 13 week basis as the fourth quarter last year (reported holiday comps +3.4% on January 4). Jewelry, Home, Sephora, Footwear and Handbags and Salon were the Company's top performing divisions during the quarter. Geographically, the Southeast and Gulf Coast were the best performing regions of the country.|
Cost of goods sold as a percentage of sales improved slightly, falling to or 66.4% of sales, compared to 66.9 % of sales. The improvement was primarily driven by decreased promotional activity during the quarter resulting from an improved inventory position. This improvement was partially offset by the continued growth in the Company's online and major appliance businesses and higher shrink rates
Moving down the income statement a little more, gross margin was +50 bps to 33.6%. The improvement was primarily driven by decreased promotional activity during the quarter resulting from an improved inventory position. This improvement was partially offset by the continued growth in the Company's online and major appliance businesses and higher shrink rates.
Looking ahead, in its fiscal year 2019, the company expects to see earnings of $0.05-0.25/share, falling in-line with expectations (mid-point is below expectations); comps of +0-2% are below expectations, but slightly ahead of last year comps. The company also said, "in 2018, we will intensify our market share efforts in Appliances, Mattresses and Furniture, while continuing to take steps to modernize our apparel assortment and omni-channel. Our strategy and plan is clear and consistent, and we remain focused on two critical factors - to operate the business for growth and deliver profitable earnings."
On its conference call this morning, the company said for fiscal year 2019, it sees moderate improvement in gross margin (consensus +40 bps to 35%), EBITDA $915 million; FCF $200-300 million, inventory down mid-single digits; focused on improving margins. January was soft but still beat expectations; management used the month to pilot marketing/pricing initiatives; launching new marketing campaign soon. In the first quarter, the company sees comps at the upper end of 0-2% fiscal year 2019 guidance (consensus +1%), with gross margin down vs. tough comp.
Following the open, JCP have ticked up a little some from its $3.37 pre-market low. Shares are currently below its 20, 50, and 100-day moving averages and is now near its 100-day moving average.