Comparable store sales grew 3.7% over the holiday period

Comparable store sales grew 3.7% over the holiday period

US department store retailer JC Penney has seen its share price spike, after hailing a solid performance over the holiday season and offering an optimistic outlook for the fourth-quarter.

In a preliminary update for the combined November/December period, JC Penney said comparable store sales grew 3.7% year-on-year.

"Our highest priority over the last year has been to restore profitable sales growth at JC Penney," said CEO Mike Ullman. "This holiday season was instrumental in that effort - and our teams delivered."

He later added: "Customers clearly responded to our combination of great merchandise and compelling promotions this holiday season. We are proud of these results, and believe the work we are doing will fuel the continued growth of our business."

UBS analyst Michael Binetti believes the same store sales upside was from strong sell-throughs of cold weather merchandise early in the season, potentially leaving less clearance risk in January. 

The retailer added that it now expects fourth-quarter comparable store sales to be at the upper end of its previous guidance range of 2-4 %.

Binetti believes JC Penney's fundamental outlook has changed despite a well-executed holiday. "We believe there is risk same store sales could slow again as JC Penney laps more challenging compares in the first half of 2015," he noted. 

JC Penney's share price was up 17.4% to US$7.70 in pre-market trading today (7 January).