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J. C. Penney Company, Inc.

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Driven by its strategic initiatives, J. C. Penney came up with better-than-expected fourth-quarter fiscal 2015 results. The company reported adjusted earnings of $0.39 per share in the final quarter that surpassed the Zacks Consensus Estimate of $0.22, reflecting the fourth straight quarter of beat. Net sales also improved 2.6%, while comps grew 4.1%. J. C. Penney has been focusing on deeper penetration of private brands, omni-channel capabilities, refurbishment of stores, and expansion of Sephora locations to fuel a strong turnaround. For fiscal 2016, management expects comps growth of 3% to 4% and projects gross margin expansion of 40 to 60 basis points. Despite these positives, the company’s high-debt level draws some concern. Nevertheless, management is concentrating on lowering the debt level and expects to reduce its net debt to EBITDA ratio to less than three times by fiscal 2017.

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