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J.C. Penney shares up on sales surprise

Shares of J.C. Penney Co. rose Thursday, as the company reported same-store sales ahead of analyst expectations amid a difficult retail environment.
/ Source: The Associated Press

Shares of J.C. Penney Co. rose Thursday, as the company reported same-store sales ahead of analyst expectations amid a difficult retail environment.

Typically, in difficult retail environment, luxury retailers outperform mid-tier retailers such as J.C. Penney. However, J.C. Penney reported its monthly same-store sales fell just 1.9 percent, a much smaller drop than the 6.3 percent decline analysts polled by Thomson Financial expected.

By contrast, luxury retailer Nordstrom Inc. reported a 6.6 percent drop, much larger than the 0.7 percent decline analysts predicted.

J.C. Penney said sales of apparel were strong, as well as sales in the Northwest. Customer response to both seasonal clearance merchandise and new spring merchandise helped results. The company also raised its fiscal fourth-quarter guidance.

Goldman Sachs analyst Adrianne Shapira said J.C. Penney posted the strongest results versus expectations, along with Kohl's Inc. In a note to investors on Thursday, she said retail sales were mainly in line with "subdued" expectations, while investors were likely expecting larger misses, particularly within the department-store sector.

"We would the view the month's in-line results and maintained guidance as justification for a pop in equity prices," she said, in terms of the larger retail sector. "However, we would once again caution investors to not jump in following this move as the sector will likely remain choppy over the next several months."

J.C. Penney shares rose $3.71, or 8.5 percent, to $47.43 during midday trading. The stock has traded between $33.27 and $87.18 over the past 52 months.