J.C. Penney Company, Inc. (NYSE:JCP)’s strong second quarter results, released today, appear to have caught the market off-guard. Shares are up by 5.89% today, though they have given back some of their earlier gains, a day after shares dipped by 2.2% as investors appeared to be anticipating an earnings miss. Instead J.C. Penney delivered an adjusted earnings loss of $0.41, well ahead of estimates of a loss of $0.49. The loss was also a big improvement over the second quarter 2014 loss of $0.75.
Another positive development for J.C. Penney found in the earnings release is the company’s same-store sales, which were up by 4.1% during the quarter, solid growth for a retail company, even if starting from an arguably weak base. Revenue came in at $2.88 billion, slightly ahead of estimates, and besting the $2.80 billion in earnings from the same quarter of last year. J.C. Penney also predicted that its SG&A expenses would be trimmed by $120 million in 2015, even better than the $100 million the company had previously forecast. The latest surge builds on a strong performance for the stock year-to date, with it up by 29.94%.
The improving results appear to be consistent with the growing bullishness amongst the smart money managers tracked by Insider Monkey, who were investing far more heavily in the stock during the first quarter of the year. 29 hedge funds in our database had positions in J.C. Penney Company, Inc. (NYSE:JCP), up from 26 at the end of December. More tellingly, the total value of their collective holdings jumped by 50.11% to $175.24 million, a far greater jump than the appreciation of the stock itself, which was up by nearly 30% during the first quarter.
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