The company, reeling from previous CEO Ron Johnson's strategy to eliminate discount sales and roll out trendy merchandise, said fourth-quarter revenue eased to $3.78 billion from $3.88 billion in the quarter a year ago. Analysts had forecast $3.85 billion. But the company posted a lower-than-expected loss of 68 cents a share, vs. 85 cents forecast by Wall Street. Same-store sales were up 2% over the fourth quarter over a year ago.
Shares jumped nearly 6% before Penney posted results Wednesday, surging another 12.4% to $6.70 in after-hours trading.
The company reported a full-year operating loss of $1.42 billion, but CEO Myron "Mike" Ullman says the retailer's difficult turnaround is gaining momentum. First-quarter sales are up for the first time since early 2011 and are likely to rise to 3% to 5% over the first quarter of 2013.
"With the most challenging and expensive parts of the turnaround behind us, we will focus on improving gross margin, managing expense and steadily growing our sales in 2014,'' Ullman said.
Steven Azarbad, a portfolio manager with hedge fund Maglan Capital, says short traders were behind Penney's stock rally. "This is a pretty heavily shorted stock, so I'm sure a lot of this is short-covering after (Penney) managed to beat really low expectations."
"It is still very early in their turnaround,'' Azarbad tells USA TODAY. "In order for this to actually work, they need to get to double-digit sales just to get closer to terms of really surviving."
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Same store sales were down 7.4% in 2013, and overall sales fell nearly 9%.
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