JC Penney Shares Are Exploding Higher

JC Penney shares are up 16% in early trading after the retailer reported sales that beat expectations.

Same-store sales climbed 6.2%, compared with forecasts for 4.2%. Net sales came in at $2.8 billion compared with expectations for $2.7 billion. Gross margin for the quarter came in at 33.1%, in line with expectations. Loss per share came in at $1.16, which was narrower than the $1.25 loss expected by analysts. The company announced it had received a new, larger credit line.

Analyst Brian Sozzi recently explained why he's now bullish on the retailer, whose stock has climbed 37% in the past three months:

…we think when weather has been cooperative throughout the U.S in the first quarter, JC Penney is sucking in a good bit of mall traffic via a combination of effective promotional messaging (we are seeing more consistent promotions in the store, not intra-quarter spikes in worrying "% off signs" as was evident during the holidays), better in stocks on name brand merchandise and basics, and stores that are finally cohesive in terms of layout (home department finagling has concluded).

Shares are trading at $9.75.