Shares of the department-store chain rallied in spite of a disappointing holiday sales update.
Shares of J.C. Penney (NYSE:JCP) were moving higher today after the company reported holiday sales last night, and gave an update on its current position.
Despite weak results over the holiday season, which included a comparable-sales drop of 3.5% on a calendar-shifted basis, investors still found something to like; they sent the beaten-down stock up 11.2% as of 3:28 p.m. EST.
There's no question that J.C. Penney's comparable sales over the holiday season, the busiest time of year for retailers, were disappointing, especially considering the overall strong consumer environment and other reports that retail sales surged during the gift-giving season.
Despite the weak numbers, the retailer said it was still on track for positive free cash flow for the year, and would reduce inventory by $225 million from a year ago, or 8%, a positive sign for increased profitability.
But considering how far the stock has fallen and how cheap it is, investors seem to see an upside in the store-closing plan, and confirmation that J.C. Penney will still deliver positive free cash flow for the year.