Executive Summary

• JCPenney reported 1Q17 adjusted EPS of $0.06 versus the consensus estimate of $(0.21).
• Total revenues decreased by 3.7%, to $2.7 billion from $2.8 billion in the year-ago quarter. Comps were down 3.5% versus consensus of (0.6)%. Comps improved in March and April by 600 basis points compared with a “very challenging” February, according to the company. Management also noted an improvement in trends in the women’s apparel category, particularly in active apparel and dresses.
• Management reiterated its prior guidance for the full year. The company expects adjusted EPS of $0.40–$0.65 versus the consensus estimate of $0.65. The company expects full-year comps of (1)%–1%, a gross margin increase of 20–40 basis points and SG&A to be down 1%–2% on a dollar basis versus FY16.