J. C. Penney Company, Inc. (NYSE: JCP) today announced financial
results for its fiscal second quarter ended Aug. 3, 2019. Net loss
for the quarter was $48 million or ($0.15) per share.
Comparable sales decreased 9.0 % for the quarter.
Excluding the impact of the Company’s exit from major
appliance and in-store furniture categories, comparable sales
decreased 6.0 % for the quarter. Cost of goods sold for the
quarter was 63.2 % of sales, a decrease of 310 basis points
compared to the same period last year. Inventory at the end
of the second quarter was $2.47 billion, down 12.5 % compared to
the end of the second quarter last year.
“I am pleased with the results we delivered this
quarter and the progress we are making against our plan.
While we still have work to do on our topline, I strongly believe
that growing sales in an unprofitable way is simply not an
option. The only way I know how to reconstruct a business, is
through a holistic approach across all the key tenets of strategic,
purposeful and effective retailing. Notably this quarter, the
meaningful improvement we delivered in cost of goods sold was
driven by lower permanent markdowns, improved shrink results,
increased store and online selling margins and the exit of major
appliance and in-store furniture categories. Additionally, we
reduced inventory by 12.5 % as we continue to reinstate the
discipline required to improve inventory management and
productivity. Delivering on our customers’ expectations
relies heavily on our vendors and the portfolio of brands we offer.
The ongoing dialogues and interactions we are having with our
vendors are strong and positive – they are equally excited about
our direction and are bringing new ideas and innovating with us,”
said Jill Soltau, chief executive officer of JCPenney.
“Today we will begin sharing more insights from
where we have been as a company and the holistic approach we are
taking to reposition JCPenney to its rightful place in the retail
landscape. We have attracted top talent in the industry and
each of these passionate leaders made a choice to come to JCPenney
at a pivotal time. Together, we are laser-focused on two
parallel paths. One is building a framework to reestablish
the practices needed to strengthen the day to day operations of our
business. Concurrently, we are developing differentiating,
transformational initiatives. The journey we are on will restore
health back into our company. It is an ongoing process and
the proposition we are implementing is for the long-term. We
are not simply running a business – we are rebuilding a
business. We are making a difference and today, I feel more
confident than ever that we will reinvigorate and rejuvenate this
great company to sustainable, profitable growth. I will
continue providing updates as we move through our business plan and
finalize a more comprehensive, long-term strategy for JCPenney,”
Soltau added.
For the quarter ended Aug. 3, 2019, total net
sales decreased 9.2 % to $2.51 billion compared to $2.76 billion
for the quarter ended Aug. 4, 2018. Comparable sales decreased 9.0
% for the quarter. Excluding the impact of the
Company’s exit from major appliance and in-store furniture
categories, comparable sales decreased 6.0 % for the quarter.
Credit income was $110 million for the second quarter this
year compared to $67 million in the second quarter last year.
Cost of goods sold, which excludes depreciation
and amortization, was $1.59 billion, or 63.2 % of sales, in the
second quarter this year compared to $1.83 billion, or 66.3 % of
sales in the same period last year. The 310-basis point decrease as
a rate of sales was primarily driven by lower permanent markdowns,
improved shrink rates as a rate of net sales, improvements in both
store and online selling margins, and the exit from the major
appliance and in-store furniture categories earlier this year.
SG&A expenses for the second quarter were
$870 million, or 34.7 % of net sales this year compared to $880
million, or 31.9 % of net sales, last year. The decrease in
SG&A dollars this year was primarily due to lower store
controllable expenses and advertising, which were offset by
slightly higher incentive compensation. Last year, the
Company recorded a $7 million benefit in SG&A expenses in the
second quarter related to the buyout of a store leasehold interest.
Additionally, in connection with the adoption of the new Lease
Accounting Standard at the beginning of fiscal 2019, SG&A
expenses in the second quarter this year included approximately $5
million related to the Company’s home office lease. Last
year, the home office lease related expense was recorded as
depreciation and amortization and interest expense.
For the second quarter, the Company’s net loss
was $48 million, or ($0.15) per share, compared to a net loss of
$101 million, or ($0.32) per share in the same period last
year.
Adjusted net loss was $56 million, or ($0.18)
per share, compared to an adjusted net loss of $120 million, or
($0.38) per share, last year.
Cash and cash equivalents at the end of the
second quarter were $175 million. Free cash flow was ($133)
million for the first six months this year, an improvement of $102
million compared to the same period last year.
Inventory at the end of the second quarter was
$2.47 billion, down 12.5 % compared to the end of the second
quarter last year.
The Company ended the second quarter with
liquidity of approximately $1.7 billion, and no outstanding
borrowings under its revolving credit facility. The Company
expects liquidity to be at least $1.5 billion for the remainder of
the year.
A reconciliation of GAAP to non-GAAP financial
measures is included in the schedules accompanying the consolidated
financial statements in this release.
Outlook
The Company is reaffirming its expectation of
positive free cash flow1 for full year 2019. In addition, the
Company has provided financial guidance for full year fiscal 2019
as follows:
- Comparable sales: expected to be in a range of (7.0) % to
(8.0) %;
- Comparable sales, excluding the impact of the Company’s exit
from major appliances and in-store furniture categories1: expected
to be in a range of (5.0) % to (6.0) %;
- Cost of goods sold, as a rate of net sales: expected to
decrease 150 to 200 basis points compared to last year; and
- Adjusted EBITDA1: expected to be in a range of $440
million to $475 million.
[1] A reconciliation of non-GAAP forward-looking
projections to GAAP financial measures is not available as the
nature or amount of potential adjustments, which may be
significant, cannot be determined now.
2019 Second Quarter Earnings Conference
Call DetailsAt 8:30 a.m. ET today, the Company will host a
live conference call conducted by Chief Executive Officer Jill
Soltau and Chief Financial Officer Bill Wafford. Management
will discuss the Company's performance during the quarter and take
questions from participants. To access the conference call,
please dial (844) 243-9275, or (225) 283-0394 for international
callers, and reference 5147029 conference ID or visit the Company’s
investor relations website at https://ir.jcpenney.com.
Supplemental slides will be available on the Company’s investor
relations website approximately 10 minutes before the start of the
conference call.
Telephone playback will be available for seven
days beginning approximately two hours after the conclusion of the
conference call by dialing (855) 859-2056, or (404) 537-3406 for
international callers, and referencing 5147029 conference ID.
Investors and others should note that we
currently announce material information using SEC filings, press
releases, public conference calls and webcasts. In the
future, we will continue to use these channels to distribute
material information about the Company and may also utilize our
website and/or various social media to communicate important
information about the Company, key personnel, new brands and
services, trends, new marketing campaigns, corporate initiatives
and other matters. Information that we post on our website or
on social media channels could be deemed material; therefore, we
encourage investors, the media, our customers, business partners
and others interested in our Company to review the information we
post on our website as well as the following social media
channels:
Facebook (https://www.facebook.com/jcp) and
Twitter (https://twitter.com/jcpnews).
Any updates to the list of social media channels
we may use to communicate material information will be posted on
the Investor Relations page of the Company's website at
www.jcpenney.com.
Media Relations: (972) 431-3400 or
jcpnews@jcp.com; Follow us @jcpnews
Investor Relations: (972) 431-5500 or
jcpinvestorrelations@jcp.com
About JCPenney:J. C. Penney
Company, Inc. (NYSE: JCP), one of the nation’s largest apparel and
home retailers, combines an expansive footprint of approximately
850 stores across the United States and Puerto Rico with a powerful
e-commerce site, jcp.com, to deliver style and value for all
hard-working American families. At every touchpoint, customers will
discover stylish merchandise at incredible value from an extensive
portfolio of private, exclusive and national brands. Reinforcing
this shopping experience is the customer service and warrior spirit
of approximately 95,000 associates across the globe, all driving
toward the Company's mission to help customers find what they love
for less time, money and effort. For additional information, please
visit jcp.com.
Forward-Looking StatementsThis
release may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995.
Words such as "expect" and similar expressions identify
forward-looking statements, which include, but are not limited to,
statements regarding sales, cost of goods sold, selling, general
and administrative expenses, earnings and cash flows.
Forward-looking statements are based only on the Company's
current assumptions and views of future events and financial
performance. They are subject to known and unknown risks and
uncertainties, many of which are outside of the Company's control
that may cause the Company's actual results to be materially
different from planned or expected results. Those risks and
uncertainties include, but are not limited to, general economic
conditions, including inflation, recession, unemployment levels,
consumer confidence and spending patterns, credit availability and
debt levels, changes in store traffic trends, the cost of goods,
more stringent or costly payment terms and/or the decision by a
significant number of vendors not to sell us merchandise on a
timely basis or at all, trade restrictions, the ability to monetize
assets on acceptable terms, the ability to implement our strategic
plan including our omnichannel initiatives, customer acceptance of
our strategies, our ability to attract, motivate and retain key
executives and other associates, the impact of cost reduction
initiatives, our ability to generate or maintain liquidity,
implementation of new systems and platforms, changes in tariff,
freight and shipping rates, changes in the cost of fuel and other
energy and transportation costs, disruptions and congestion at
ports through which we import goods, increases in wage and benefit
costs, competition and retail industry consolidations, interest
rate fluctuations, dollar and other currency valuations, the impact
of weather conditions, risks associated with war, an act of
terrorism or pandemic, the ability of the federal government to
fund and conduct its operations, a systems failure and/or security
breach that results in the theft, transfer or unauthorized
disclosure of customer, employee or Company information, legal and
regulatory proceedings, the Company’s ability to access the debt or
equity markets on favorable terms or at all, and the Company's
ability to comply with the continued listing criteria of the NYSE,
and risks arising from the potential suspension of trading of the
Company's common stock on that exchange. There can be no assurances
that the Company will achieve expected results, and actual results
may be materially less than expectations. Please refer to the
Company's most recent Form 10-K for a further discussion of risks
and uncertainties. Investors should take such risks into account
and should not rely on forward-looking statements when making
investment decisions. Any forward-looking statement made by
us in this press release is based only on information currently
available to us and speaks only as of the date on which it is made.
We do not undertake to update these forward-looking
statements as of any future date.
###
J. C. PENNEY COMPANY,
INC.SUMMARY OF OPERATING
RESULTS(Unaudited)(Amounts in millions except per share
data)
|
Three Months Ended |
|
|
Six Months Ended |
|
Statements of
Operations: |
August 3, 2019 |
|
August 4, 2018 |
|
% Inc. (Dec.) |
|
|
August 3, 2019 |
|
August 4, 2018 |
|
% Inc. (Dec.) |
|
Total net sales |
$ |
2,509 |
|
|
$ |
2,762 |
|
|
(9.2 |
)% |
|
|
$ |
4,948 |
|
|
$ |
5,346 |
|
|
(7.4 |
)% |
|
Credit income and other |
110 |
|
|
67 |
|
|
64.2 |
% |
|
|
226 |
|
|
154 |
|
|
46.8 |
% |
|
Total revenues |
$ |
2,619 |
|
|
$ |
2,829 |
|
|
(7.4 |
)% |
|
|
$ |
5,174 |
|
|
$ |
5,500 |
|
|
(5.9 |
)% |
|
Costs and
expenses/(income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold (exclusive of depreciation and amortization
shown separately below) |
1,585 |
|
|
1,831 |
|
|
(13.4 |
)% |
|
|
3,215 |
|
|
3,543 |
|
|
(9.3 |
)% |
|
Selling, general and administrative (SG&A) |
870 |
|
|
880 |
|
|
(1.1 |
)% |
|
|
1,726 |
|
|
1,706 |
|
|
1.2 |
% |
|
Depreciation and amortization |
137 |
|
|
140 |
|
|
(2.1 |
)% |
|
|
284 |
|
|
281 |
|
|
1.1 |
% |
|
Real estate and other, net |
3 |
|
|
12 |
|
|
(75.0 |
)% |
|
|
(2 |
) |
|
(6 |
) |
|
(66.7 |
)% |
|
Restructuring and management transition |
7 |
|
|
2 |
|
|
100.0 |
% |
+ |
|
27 |
|
|
9 |
|
|
100.0 |
% |
+ |
Total costs and expenses |
2,602 |
|
|
2,865 |
|
|
(9.2 |
)% |
|
|
5,250 |
|
|
5,533 |
|
|
(5.1 |
)% |
|
Operating income/(loss) |
17 |
|
|
(36 |
) |
|
100.0 |
% |
+ |
|
(76 |
) |
|
(33 |
) |
|
(100.0 |
)% |
+ |
Other components of net periodic pension cost/(income) |
(13 |
) |
|
(19 |
) |
|
(31.6 |
)% |
|
|
(26 |
) |
|
(38 |
) |
|
(31.6 |
)% |
|
(Gain)/loss on extinguishment of debt |
(1 |
) |
|
— |
|
|
100.0 |
% |
+ |
|
(1 |
) |
|
23 |
|
|
100.0 |
% |
+ |
Net interest expense |
74 |
|
|
79 |
|
|
(6.3 |
)% |
|
|
147 |
|
|
157 |
|
|
(6.4 |
)% |
|
Income/(loss) before income taxes |
(43 |
) |
|
(96 |
) |
|
55.2 |
% |
|
|
(196 |
) |
|
(175 |
) |
|
(12.0 |
)% |
|
Income tax
expense/(benefit) |
5 |
|
|
5 |
|
|
— |
% |
|
|
6 |
|
|
4 |
|
|
50.0 |
% |
|
Net income/(loss) |
$ |
(48 |
) |
|
$ |
(101 |
) |
|
52.5 |
% |
|
|
$ |
(202 |
) |
|
$ |
(179 |
) |
|
(12.8 |
)% |
|
Earnings/(loss) per share -
basic and diluted |
$ |
(0.15 |
) |
|
$ |
(0.32 |
) |
|
53.1 |
% |
|
|
$ |
(0.63 |
) |
|
$ |
(0.57 |
) |
|
(10.5 |
)% |
|
Financial
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales
increase/(decrease) (1) |
(9.0 |
)% |
|
0.3 |
% |
|
|
|
|
(7.3 |
)% |
|
0.2 |
% |
|
|
|
Ratios as a percentage of
total net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
63.2 |
% |
|
66.3 |
% |
|
|
|
|
65.0 |
% |
|
66.3 |
% |
|
|
|
SG&A expenses |
34.7 |
% |
|
31.9 |
% |
|
|
|
|
34.9 |
% |
|
31.9 |
% |
|
|
|
Operating income/(loss) |
0.7 |
% |
|
(1.3 |
)% |
|
|
|
|
(1.5 |
)% |
|
(0.6 |
)% |
|
|
|
Effective income tax rate |
11.6 |
% |
|
5.2 |
% |
|
|
|
|
3.1 |
% |
|
2.3 |
% |
|
|
|
Common Shares
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and outstanding shares
at end of period |
317.7 |
|
|
314.8 |
|
|
|
|
|
317.7 |
|
|
314.8 |
|
|
|
|
Weighted average shares -
basic |
319.4 |
|
|
315.7 |
|
|
|
|
|
318.6 |
|
|
314.8 |
|
|
|
|
Weighted average shares -
diluted |
319.4 |
|
|
315.7 |
|
|
|
|
|
318.6 |
|
|
314.8 |
|
|
|
|
- Comparable store sales include sales from all stores, including
sales from services, that have been open for 12 consecutive full
fiscal months and Internet sales. Stores closed for an
extended period are not included in comparable store sales
calculations, while stores remodeled and minor expansions not
requiring store closure remain in the calculations. Certain
items, such as sales return estimates and store liquidation sales,
are excluded from the Company’s calculation. Our definition and
calculation of comparable store sales may differ from other
companies in the retail
industry.
SUMMARY BALANCE
SHEETS(Unaudited)(Amounts in millions)
Summary Balance
Sheets: |
August 3, 2019 |
|
August 4, 2018 |
Current assets: |
|
|
|
Cash in banks and in transit |
$ |
163 |
|
|
$ |
171 |
|
Cash short-term investments |
12 |
|
|
11 |
|
Cash and cash equivalents |
175 |
|
|
182 |
|
Merchandise inventory |
2,471 |
|
|
2,824 |
|
Prepaid expenses and other |
275 |
|
|
221 |
|
Total current assets |
2,921 |
|
|
3,227 |
|
Property and equipment,
net |
3,591 |
|
|
4,058 |
|
Operating lease assets |
925 |
|
|
— |
|
Prepaid pension |
166 |
|
|
87 |
|
Other assets |
657 |
|
|
686 |
|
Total
assets |
$ |
8,260 |
|
|
$ |
8,058 |
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Merchandise accounts payable |
$ |
878 |
|
|
$ |
910 |
|
Other accounts payable and accrued expenses |
970 |
|
|
1,025 |
|
Current operating lease liabilities |
82 |
|
|
— |
|
Current portion of finance leases and note payable |
2 |
|
|
7 |
|
Current maturities of long-term debt |
197 |
|
|
42 |
|
Total current liabilities |
2,129 |
|
|
1,984 |
|
Noncurrent operating lease
liabilities |
1,089 |
|
|
— |
|
Long-term finance leases and
note payable |
1 |
|
|
208 |
|
Long-term debt |
3,589 |
|
|
3,960 |
|
Deferred taxes |
121 |
|
|
144 |
|
Other liabilities |
368 |
|
|
546 |
|
Total
liabilities |
7,297 |
|
|
6,842 |
|
Stockholders'
equity |
963 |
|
|
1,216 |
|
Total liabilities and
stockholders' equity |
$ |
8,260 |
|
|
$ |
8,058 |
|
SUMMARY STATEMENTS OF CASH
FLOWS(Unaudited)(Amounts in millions)
|
Six Months Ended |
Statements of Cash
Flows: |
August 3, 2019 |
|
August 4, 2018 |
Cash flows from operating
activities: |
|
|
|
Net income/(loss) |
$ |
(202 |
) |
|
$ |
(179 |
) |
Adjustments to reconcile net income/(loss) to net cash provided
by/(used in) operating activities: |
|
|
|
Restructuring and management transition |
17 |
|
|
(3 |
) |
Asset impairments and other charges |
— |
|
|
52 |
|
Net (gain)/loss on sale of non-operating assets |
(1 |
) |
|
— |
|
Net (gain)/loss on sale of operating assets |
3 |
|
|
(57 |
) |
(Gain)/loss on extinguishment of debt |
(1 |
) |
|
23 |
|
Depreciation and amortization |
284 |
|
|
281 |
|
Benefit plans |
(29 |
) |
|
(37 |
) |
Stock-based compensation |
6 |
|
|
6 |
|
Deferred taxes |
— |
|
|
(1 |
) |
Change in cash from: |
|
|
|
Inventory |
(34 |
) |
|
(21 |
) |
Prepaid expenses and other assets |
(82 |
) |
|
(21 |
) |
Merchandise accounts payable |
31 |
|
|
(63 |
) |
Accrued expenses and other |
9 |
|
|
(115 |
) |
Net cash provided by/(used in) operating activities |
1 |
|
|
(135 |
) |
Cash flows from investing
activities: |
|
|
|
Capital expenditures |
(146 |
) |
|
(221 |
) |
Proceeds from sale of non-operating assets |
1 |
|
|
— |
|
Proceeds from sale of operating assets |
12 |
|
|
121 |
|
Net cash provided by/(used in) investing activities |
(133 |
) |
|
(100 |
) |
Cash flows from financing
activities: |
|
|
|
Proceeds from issuance of long-term debt |
— |
|
|
400 |
|
Proceeds from borrowings under the credit facility |
946 |
|
|
2,258 |
|
Payments of borrowings under the credit facility |
(946 |
) |
|
(2,081 |
) |
Premium on early retirement of long-term debt |
— |
|
|
(20 |
) |
Payments of finance leases and note payable |
(1 |
) |
|
(4 |
) |
Payments of long-term debt |
(26 |
) |
|
(586 |
) |
Financing costs |
— |
|
|
(7 |
) |
Proceeds from stock issued under stock plans |
1 |
|
|
2 |
|
Tax withholding payments for vested restricted stock |
— |
|
|
(3 |
) |
Net cash provided by/(used in) financing activities |
(26 |
) |
|
(41 |
) |
Net increase/(decrease) in
cash and cash equivalents |
(158 |
) |
|
(276 |
) |
Cash and cash equivalents at
beginning of period |
333 |
|
|
458 |
|
Cash and cash equivalents at
end of period |
$ |
175 |
|
|
$ |
182 |
|
Reconciliation of Non-GAAP Financial
Measures(Unaudited)(Amounts in millions except per share
data)
We report our financial information in accordance with generally
accepted accounting principles in the United States (GAAP).
However, we present certain financial measures and ratios
identified as non-GAAP under the rules of the Securities and
Exchange Commission (SEC) to assess our results. We believe
the presentation of these non-GAAP financial measures and ratios is
useful in order to better understand our financial performance as
well as to facilitate the comparison of our results to the results
of our peer companies. In addition, management uses these
non-GAAP financial measures and ratios to assess the results of our
operations. It is important to view non-GAAP financial
measures in addition to, rather than as a substitute for, those
measures and ratios prepared in accordance with GAAP. We have
provided reconciliations of the most directly comparable GAAP
measures to our non-GAAP financial measures presented.
The following non-GAAP financial measures are adjusted to
exclude restructuring and management transition charges, other
components of net periodic pension cost/(income), the (gain)/loss
on extinguishment of debt, the net (gain)/loss on the sale of
non-operating assets, the proportional share of net income from our
joint venture formed to develop the excess property adjacent to our
home office facility in Plano, Texas (Home Office Land Joint
Venture) and the tax impact for the allocation of income taxes to
other comprehensive income items related to our pension plans and
interest rate swaps. Unlike other operating expenses,
restructuring and management transition charges, other components
of net periodic pension cost/(income), the (gain)/loss on
extinguishment of debt, the net (gain)/loss on the sale of
non-operating assets, the proportional share of net income from the
Home Office Land Joint Venture and the tax impact for the
allocation of income taxes to other comprehensive income items
related to our pension plans and interest rate swaps are not
directly related to our ongoing core business operations, which
consist of selling merchandise and services to consumers through
our department stores and our website at jcpenney.com.
Further, our non-GAAP adjustments are for non-operating associated
activities such as closed store impairments included in
restructuring and management transition charges and such as joint
venture earnings from the sale of excess land included in the
proportional share of net income from our Home Office Land Joint
Venture. Additionally, other components of net periodic
pension cost/(income) is determined using numerous complex
assumptions about changes in pension assets and liabilities that
are subject to factors beyond our control, such as market
volatility. We believe it is useful for investors to
understand the impact of restructuring and management transition
charges, other components of net periodic pension cost/(income),
the (gain)/loss on extinguishment of debt, the net (gain)/loss on
the sale of non-operating assets, the proportional share of net
income from the Home Office Land Joint Venture and the tax impact
for the allocation of income taxes to other comprehensive income
items related to our pension plans and interest rate swaps on our
financial results and therefore are presenting the following
non-GAAP financial measures: (1) adjusted net income/(loss)
before net interest expense, income tax (benefit)/expense and
depreciation and amortization (adjusted EBITDA); (2) adjusted
net income/(loss); and (3) adjusted earnings/(loss) per
share-diluted.ADJUSTED EBITDA, NON-GAAP FINANCIAL
MEASURE:
The following table reconciles net income/(loss), the most
directly comparable GAAP measure, to adjusted EBITDA, a non-GAAP
financial measure:
|
Three Months Ended |
|
Six Months Ended |
|
August 3, 2019 |
|
August 4, 2018 |
|
August 3, 2019 |
|
August 4, 2018 |
Net income/(loss) |
$ |
(48 |
) |
|
$ |
(101 |
) |
|
$ |
(202 |
) |
|
$ |
(179 |
) |
Add: Net interest
expense |
74 |
|
|
79 |
|
|
147 |
|
|
157 |
|
Add: (Gain)/loss on
extinguishment of debt |
(1 |
) |
|
— |
|
|
(1 |
) |
|
23 |
|
Add: Income tax
expense/(benefit) |
5 |
|
|
5 |
|
|
6 |
|
|
4 |
|
Add: Depreciation and
amortization |
137 |
|
|
140 |
|
|
284 |
|
|
281 |
|
Add: Restructuring and
management transition charges |
7 |
|
|
2 |
|
|
27 |
|
|
9 |
|
Add: Other components of
net periodic pension cost/(income) |
(13 |
) |
|
(19 |
) |
|
(26 |
) |
|
(38 |
) |
Less: Net (gain)/loss on
the sale of non-operating assets |
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
Less: Proportional share
of net income from the home office land joint venture |
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
160 |
|
|
$ |
105 |
|
|
$ |
234 |
|
|
$ |
256 |
|
ADJUSTED NET INCOME/(LOSS) AND ADJUSTED EARNINGS/(LOSS)
PER SHARE-DILUTED, NON-GAAP FINANCIAL MEASURES:
The following table reconciles net income/(loss) and
earnings/(loss) per share-diluted, the most directly comparable
GAAP measures, to adjusted net income/(loss) and adjusted
earnings/(loss) per share-diluted, non-GAAP financial measures:
|
Three Months Ended |
|
Six Months Ended |
|
August 3, 2019 |
|
August 4, 2018 |
|
August 3, 2019 |
|
August 4, 2018 |
Net income/(loss) |
$ |
(48 |
) |
|
$ |
(101 |
) |
|
$ |
(202 |
) |
|
$ |
(179 |
) |
Earnings/(loss) per
share-diluted |
$ |
(0.15 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.63 |
) |
|
$ |
(0.57 |
) |
|
|
|
|
|
|
|
|
Add: Restructuring and
management transition charges (1) |
7 |
|
|
2 |
|
|
27 |
|
|
9 |
|
Add: Other components of
net periodic pension cost/(income) (1) |
(13 |
) |
|
(19 |
) |
|
(26 |
) |
|
(38 |
) |
Add: (Gain)/loss on
extinguishment of debt (1) |
(1 |
) |
|
— |
|
|
(1 |
) |
|
23 |
|
Less: Net (gain)/loss on
the sale of non-operating assets (1) |
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
Less: Proportional share
of net income from the home office land joint venture (1) |
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
Less: Tax impact
resulting from other comprehensive income allocation (2) |
— |
|
|
(1 |
) |
|
— |
|
|
(3 |
) |
Adjusted net income/(loss)
(non-GAAP) |
$ |
(56 |
) |
|
$ |
(120 |
) |
|
$ |
(203 |
) |
|
$ |
(189 |
) |
Adjusted earnings/(loss) per
share-diluted (non-GAAP) |
$ |
(0.18 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.64 |
) |
|
$ |
(0.60 |
) |
- Reflects no tax effect due to the impact of the Company's tax
valuation allowance.
- Represents the net tax benefit that resulted from our other
comprehensive income allocation between our Operating loss and
Accumulated other comprehensive income.
Reconciliation of Non-GAAP Financial
Measures(Unaudited)(Amounts in millions)
Comparable store sales is a key performance indicator used by
numerous retailers to measure the sales growth of its underlying
operations. Comparable store sales is considered to be a GAAP
measure as the key performance indicator is measured based on GAAP
net sales. Comparable store sales that excludes the impact of
major appliance and in-store furniture categories is considered a
non-GAAP measure. Given our elimination of these categories
from our merchandise assortment, we believe that providing a
comparable store sales metric that excludes the impact of major
appliance and in-store furniture categories is useful for investors
to evaluate the impact of these changes to our sales
performance.
ADJUSTED COMPARABLE STORE SALES INCREASE/(DECREASE),
NON-GAAP FINANCIAL MEASURE:
The following table reconciles comparable store sales
increase/(decrease), the most directly comparable GAAP measure, to
adjusted comparable store sales increase/(decrease), a non-GAAP
measure.
|
Three Months Ended |
|
Six Months Ended |
|
August 3, 2019 |
|
August 4, 2018 |
|
August 3, 2019 |
|
August 4, 2018 |
Comparable store sales
increase/(decrease) |
(9.0 |
)% |
|
0.3 |
% |
|
(7.3 |
)% |
|
0.2 |
% |
Impact related to major
appliance and in-store furniture categories |
3.0 |
% |
|
0.5 |
% |
|
1.7 |
% |
|
0.1 |
% |
Adjusted comparable store
sales increase/(decrease) (non-GAAP) |
(6.0 |
)% |
|
0.8 |
% |
|
(5.6 |
)% |
|
0.3 |
% |
Free cash flow is a key financial measure of our ability to
generate additional cash from operating our business and in
evaluating our financial performance. We define free cash
flow as cash flow from operating activities, less capital
expenditures, plus the proceeds from the sale of operating
assets. Free cash flow is a relevant indicator of our ability
to repay maturing debt, revise our dividend policy or fund other
uses of capital that we believe will enhance stockholder
value. Free cash flow is considered a non-GAAP financial
measure under the rules of the SEC. Free cash flow is limited
and does not represent remaining cash flow available for
discretionary expenditures due to the fact that the measure does
not deduct payments required for debt maturities, payments made for
business acquisitions or required pension contributions, if
any. Therefore, it is important to view free cash flow in
addition to, rather than as a substitute for, our entire statement
of cash flows and those measures prepared in accordance with
GAAP.
FREE CASH FLOW, NON-GAAP FINANCIAL MEASURE:
The following table sets forth a reconciliation of cash flow
from operating activities, the most directly comparable GAAP
measure, to free cash flow, a non-GAAP financial measure, as well
as information regarding net cash provided by/(used in) investing
activities and net cash provided by/(used in) financing
activities:
|
Six Months Ended |
|
August 3, 2019 |
|
August 4, 2018 |
Net cash provided by/(used in)
operating activities |
$ |
1 |
|
|
$ |
(135 |
) |
Add: Proceeds from sale of operating assets |
12 |
|
|
121 |
|
Less: Capital expenditures |
(146 |
) |
|
(221 |
) |
Free cash flow (non-GAAP) |
$ |
(133 |
) |
|
$ |
(235 |
) |
|
|
|
|
Net cash provided by/(used in)
investing activities (1) |
$ |
(133 |
) |
|
$ |
(100 |
) |
Net cash provided by/(used in)
financing activities |
$ |
(26 |
) |
|
$ |
(41 |
) |
- Net cash provided by/(used in) investing activities includes
capital expenditures and proceeds from sale of operating assets,
which are also included in our computation of free cash flow.
J C Penney (NYSE:JCP)
Historical Stock Chart
Von Feb 2024 bis Mär 2024
J C Penney (NYSE:JCP)
Historical Stock Chart
Von Mär 2023 bis Mär 2024