The third quarter of 2015 was rough for American department stores. Macy’s, the nation’s largest department-store chain, had such a bad quarter that it cut its year-end forecasts across the board, lowering earnings, revenue, and same-store sales projections. And upscale competitor Nordstrom followed suit after reporting a 42% drop in profits, which caused shares to plunge yesterday (Nov. 12).
But there was one silver lining, and it’s not what you’d expect. JC Penney—yes, JC Penney—just had the best quarter in terms of same-stores sales, which were up 6.4% for the three month period ended Oct. 31. That helped boost net sales nearly 5% to $2.9 billion, the company announced today (Nov. 13). The retailer also dialed up its year-end outlook for adjusted earnings before interest, taxes, depreciation, and amortization.
The better-than-expected quarter was helped by strong back-to-school sales, continued success at in-store Sephora beauty shops, and improved performance in the men’s, home, footwear and handbag categories, CEO Marvin Ellison told investors on a conference call.
All that said, the retailer still isn’t turning a profit, but it’s net loss shrank 23% to $137 million.
The fact that the retailer managed to drive more same-store sales—a crucial retail metric—while all of its rivals struggled in that area suggests that it might finally be rebounding from its disastrous days under former CEO Ron Johnson—and stealing back its lost market share.
“While it is evident that JC Penney took market share during this very competitive third quarter, we are intensifying our focus and we’ll relentlessly pursue our goal to become a world-class retailer,” said Ellison.
Despite the solid performance, JC Penney shares plummeted more than 9% in early-market trading today, reflecting concerns about the broader retail industry. Its stock saw a bump earlier in the week when it first release same-store sales numbers.
It’s worth noting that Kohl’s, which just completed the first year of its comeback bid, also posted modest earnings last quarter that beat analyst estimates (paywall). Profits fell 15%, while sales ticked up 1.2% during the period ended Oct. 31, the company announced yesterday. Same-store sales rose 1%, compared with a 1.8% drop a year earlier.