JC Penney 1Q14 Earnings Call Notes

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A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

We can no focus on positioning JCP for long term growth

“now we’re in the third and final stage which we call the go-forward phase during which we’re positioning J.C. Penney for long-term profitable growth.”

Good performance despite poor weather in Feb and March. Share gains

“vOur sales growth was achieved despite a difficult weather conditions in February and March, and indicates market share gains relative to our competitors’ performance.”

Store traffic positive in April

” April represents the first time in over 30 months our store traffic was positive.”

Refinancing credit facility

“We are pleased to announce the refinancing of our existing credit facility with a new 2.35 billion ABL credit facility that will have two components, a revolving credit portion and a smaller term loan. The facility is being underwritten by lead arrangers, Wells Fargo and Bank of America Merrill Lynch, as well as J.P. Morgan, Barclays and Goldman Sachs. Wells Fargo is a lead arranger for the revolver, and Bank of America Merrill lynch is a lead arranger on the term loan.

We decided to pursue this new facility proactively to extend the maturity several years and enhance our liquidity position particularly during periods of peak working capital needs. With improving trends in or business as well as favorable market conditions, we expect to receive better pricing relative to our old facility.”

April was very very strong because of Easter shift

” April was very, very strong because of the shift in the Easter holiday. We had very tough business in February, like March like everyone else; we were down something like $40 million to plan at one point just from weather. So we had a great recovery in April”

Put supplier anxieties to rest

“I have spent a lot of time with our suppliers. I think they feel very comfortable that we are a great partner. And I think we put to bed a lot of the previous anxieties and frankly our results will only enhance that we are going forward. We’d not had major issues with our mall landlords or other landlords. I think at this point we are a preferred tenant.”

Back to being aligned with customers

” as I go to stores I don’t hear from associates that we’re in misalignment at this point. I think we’re back to running the business properly.”