Executive Summary

• JCPenney reported 4Q16 adjusted EPS of $0.64, beating the consensus estimate of $0.61. Reported 4Q16 revenues of $4.0 billion were down 0.9% from the year-ago period. Total comps were down 0.7% versus the consensus estimate of a 0.5% decline.
• The company announced major store closure plans that include closing two distribution centers and 130–140 stores over the next few months. The total store closures represent about 13%–14% of the company’s store portfolio and less than 5% of total sales.
• With the announced store closures, the company expects adjusted EPS of $0.40–$0.65 for FY17. Comps are expected to be (1)%–1%. Gross margin is expected to be up 20–40 basis points versus 2016.