J. C. Penney Company, Inc. announced financial results for its fiscal fourth quarter and full year ended January 31, 2015. Comparable store sales grew 4.4 percent for both the fourth quarter and full fiscal year.
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The combination of this sales improvement, stronger gross margins and decreasing SG&A expense resulted in a $1.1 billion increase in EBITDA for the year.
For the fourth quarter, which included a successful holiday season, JCPenney reported net sales of $3.89 billion compared to $3.78 billion in the fourth quarter of 2013.
Comparable store sales rose 4.4 percent for the quarter. Online sales through jcpenney.com were $428 million for the quarter, up 12.5 percent versus the same period last year.
Men's apparel, Home and Fine Jewelry were the Company's top performing merchandise divisions during the quarter. Sephora inside JCPenney, now in 492 locations, also continued its strong performance. Geographically, all regions delivered sales gains over the same period last year with the best performance in the central and western regions of the country.
For the fourth quarter, gross margin improved 540 basis points to 33.8 percent of sales, compared to 28.4 percent in the same quarter last year. Gross margin was positively impacted by significant improvement in the Company's merchandise mix and margin on clearance sales over the prior year quarter.
SG&A expenses for the quarter were up $28 million to $1.032 billion, or 26.5 percent of sales.
Operating income for the quarter was $63 million, which represents a $201 million increase over last year. EBITDA was $220 million, a $197 million improvement from the same period last year.
Adjusted net income for the fourth quarter improved $206 million to breakeven. Net income for the quarter was a loss of $59 million, compared to a gain of $35 million in last year's fourth quarter, which benefitted from a one-time $270 million non-cash tax credit. These income tax changes resulted in a negative year over year impact of $292 million on the Company's reported net income.
For the full year 2014, comparable store sales increased 4.4 percent. Total sales increased 3.4 percent for the year. Internet sales through jcpenney.com grew $145 million to $1.22 billion for the year, increasing 13.4 percent over last year.
For the year, gross margin increased 540 basis points to 34.8 percent from 29.4 percent in the prior year. SG&A decreased $121 million or 210 basis points compared to the prior year.
EBITDA was $323 million, a more than $1.1 billion improvement from last year.
Free cash flow was $57 million, a positive increase of over $2.8 billion.
The Company ended the year with liquidity of approximately $2.1 billion. ■