Currently at $1.30...Report aayo aaja...not too bad....Sears closing...good for JCP..market share capture garna...ko lagi.....JCP lae...unprofitable stores haru bandha gardhai xa.....creditors haru number one problem ho JCP ko...kina ki...Creditors harulai time ma interest ra principal tirna sakena vanae...Bank le ghar jafat gareko jastai creditor le shareholder ko haat bata company tapkouni chance hunxa...tehi hunxa vanni 'guess' ma...market price yeti sasto vako ho...tara..aja ko conference call ma...JCP ko CEO lae vannin or vannu vo...yesto kura.... As a reminder, we have very manageable near-term debt maturities, with $50 million of unsecured debt maturing in October of 2019, and $110 million of unsecured debt maturing in 2020. Cash and cash equivalents at the end of the third quarter were $168 million; free cash flow was a use of $500 million for the first nine months of the year. Inventory at the end of the third quarter was approximately $3.2 billion, down $182 million or 5.4% versus last year. We expect inventory to be down at least 6% at year end. During the third quarter, we completed a multiyear extension of our private label and cobranded credit card agreement with Synchrony Bank. Matlab dherai gahiriyera heri rahanu ta pardaina...tara....management looks comfortable about cash position.........anyway, stock looks to me that it will be going up from here....paper trading matrai ho hai Also, off note, we did see strong results in our stores that were previously co-tenant with Bon-Ton. Following their liquidation, we have seen these stores outpaced the balance of the chain. We believe this bodes well and speaks to the overall market share opportunities that exist from competitor clothing. As a reminder, starting in the first quarter of this year, credit income is now included in total revenues and was previously reported as an offset to SG&amp;A in prior period. For the third quarter, credit income was $80 million compared to $69 million in the third quarter last year, which exceeded our initial expectations. Our credit income this year has improved relative to our expectations at the beginning of the year, which is largely a function of an improvement in the credit customer portfolio. Interest xa vanae...conferece call transkript---copy/paste handiyeko xu.... J.C. Penney Company Inc. (NYSE:JCP) Q3 2018 Earnings Conference Call November 15, 2018 8:30 AM ET Executives Trent Kruse - SVP, Finance and IR Jill Soltau - CEO Analysts Gaby Carbone - Deutsche Bank Jeff Van Sinderen - B. Riley FBR Chuck Grom - Gordon Haskett Mark Altschwager - Robert W. Baird Kimberly Greenberger - Morgan Stanley Matt Boss - JP Morgan Oliver Chen - Cowen and Company Paul Lejuez - Citi Erinn Murphy - Piper Jaffray Operator Good day, ladies and gentlemen, and welcome to the Q3 2018 J. C. Penney Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will have a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference call is being recorded for replay purposes. It is now my pleasure to turn the conference over to Mr. Trent. Please go ahead. Trent Kruse All right, thank you, Haley, and good morning everyone. As a reminder, the presentation this morning includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which reflects the company's current view of future events and financial performance. The words expect, plan, anticipate, believe and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties. And the company's future results of operations could differ materially from historical results or current expectations. For more details on these risks, please refer to the company's Form 10-Q and other SEC filings. Please note that no portion of this presentation may be rebroadcast in any form without the prior written consent of J. C. Penney. For those listening after November 15, 2018, please note that this presentation will not be updated. And it is possible that the information discussed will no longer be current. Also supplemental reference&nbsp;slides&nbsp;are available on our Investor Relations Web site. While management will not be speaking directly to all the&nbsp;slides&nbsp;presented, these&nbsp;slides&nbsp;are meant to facilitate your review of the company's results and to be used as a reference document following the call. Joining me on today's call is Jill Soltau, Chief Executive Officer of J. C. Penney. Jill will open the call in a few moments with some brief remarks on her first few weeks at J. C. Penney as well as highlight a few key focus areas for the holiday season. I will then rejoin the call to provide a detailed overview of our third quarter results before passing it back to Jill who will provide some closing comments. Following our prepared remarks, we look forward to taking your questions. I would now like to introduce J. C. Penney, CEO, Jill Soltau. Jill Soltau Thank you, Trent, and good morning everyone. It is pleasure to be joining the call this morning. And on behalf of our entire organization, I would like to thank you for your continued interest in and support of J. C. Penney. I am excited to be here and to have the privilege of leading such an iconic quint essential American brand with a strong and long lasting heritage. In the coming weeks and months, I will continue to meet with and learn from our team throughout the entire organization, talking with them about we are doing that's working well. And most importantly, what we can do to address our opportunities. We will be focusing our review on many areas such as customer data and perceptions, and how we communicate with our customer including our promotional cadence, rebuilding our merchandizing capabilities, execution both in-store and online, omnichannel strategies, our retail footprint, forecasting accuracy, shrink results, and of course inventory levels and replenishment capabilities. While this will be a lengthy process, I understand the need for quick action. I will ensure that our decisions are made thoughtfully and carefully using all available information. My commitment is that we will make sound strategic decisions backed by data and will always be rooted in delivering our customer's wants and expectations. We will act swiftly but thoughtfully as we move the business forward. While these things take time, assessing current business strategies and implementing new ones is my top priority. I look forward to sharing my thoughts and strategies as we progress. With that, let me share some of my initial impressions of the business. As I walk our stores, we are over assorted and heavy on inventory. And we have a clear opportunity to provide an enhanced shopping experience for our customers. In an effort to improve the experience and assortment, we made a decision to initiate an inventory liquidation to clear through excess levels of slow moving basic inventory. We have made solid progress on this initiative as evidenced by our inventory position at the end of the quarter. In addition, the right sizing of our inventory eliminates certain tasks associated with high levels of inventory and slow moving product which allows our great store associates to better focus on providing the excellent customer service J. C. Penney has traditional been known for. All that said, we believe we can deliver a profitable growth in the future by strengthening our retail channels [ph] and better managing our inventory position. We know we have more work ahead of us. And we are well underway with are targeted inventory reduction plan by the end of fiscal 2019. By executing on these fundamental operational strategies, we have a sizeable opportunity to improve our gross margin results and more profitably grow our sales. By doing so, we can mitigate markdown risk, improve profitability, and more effectively leverage our working capital. As a team, this remains a top priority. And in just a moment, Trent will provide details on some of the clear margin opportunities we have ahead of us as a result of our enhanced inventory management focus and improved fundamental. Now let me pivot and briefly discuss Q4. As we look ahead, we are focusing our efforts on executing well this holiday season. While most holiday business strategies were created and implemented prior to me joining the company, I have been actively involved in ensuring that J. C. Penney is prepared for the upcoming holiday season. Let me highlight a few key focus areas for the holiday season. In our women's apparel business, we continue to adjust our assortments to deliver more profitable sales which will add to the already improved results in that business. As we are seeing more seasonally cool temperatures, we can also begin to leverage our strength in outwear and sweaters for the holiday season. For our ecommerce business, we are working to improve the overall customer experience in our digital channel to ensure we have a consistent experience for our customer regardless of whether she is shopping online, mobile or in-store. We will take advantage of market share opportunities from competitor store closing across many categories of our business such as toys where we have added 40% more to our assortment this holiday season. Our jewelry business continues to perform well for us. So we will leverage event driven sales during the holiday as well as expanding some key best sellers throughout the chain. And of course, offering some excellent gifts and deals this Black Friday. Now before we move into the details of our financial results, I want to take the opportunity to introduce and welcome Michael Fung, who has joined J. C. Penney as Interim CFO as we continue our search for a permanent chief financial officer. As I continue to assess the opportunities surrounding the company's business, his experienced leadership and guidance will help J. C. Penney benefit from expertise of a seasoned retail CFO who has supported other retailers during a pivotal time in their evolution and helped deliver meaningful progress. Michael brings more than 23 years of experience in value-oriented retail and finance operations. His knowledge and contributions will be a valuable addition to our senior leadership team as work together to develop solutions and drive decisions that are in the best interest of our customers and shareholders. Finally, given that Michael has been here now for just a couple weeks, I am going to turn the call over to Trent to give us more detailed financial update on our Q3 results. I'll rejoin the call shortly to provide a few closing remarks before opening up the lines for questions. Trent? Trent Kruse All right. Thank you, Jill, and good morning everyone. As we reported earlier this morning, total net sales decreased 5.8% versus last year and comp sales decreased 5.4%. On a shifted basis, comp sales for the third quarter decreased 4.5% gross margin decreased 210 basis points, primarily the result of our decision to liquidate slow moving and aged inventory during the quarter. While our decision had an adverse impact on margins, we know the actions we are taking with inventory to strike the right balance between an enhanced assortment and her shopping experience are necessary to deliver better top line results and profitability moving forward. Of note, non-clearance selling margins both in-store and online were up versus last year. This speaks to the progress we are making in our assortments and provide evidence that as we continue to get our inventory better aligned with our customers once and expectations, we will deliver improved profitability. We ended the quarter with liquidity in excess of $1.9 billion and we continue to expect positive free cash flow for fiscal 2018. Let's turn out to a more detailed review of our Q3 performance. As I mentioned earlier, our comp sales on a shifted basis were down 4.5%. Divisions in categories that outperform the total company comps for the quarter were jewelry, women's apparel, men's, and soft tone. We're pleased with the continued performance improvement in our women's apparel business while comps were approximately flat on a shifted basis in women, we saw sequential improvement versus the second quarter on a two-year staff basis and continue to be pleased with the customer's response as we land new sets and stores and online. In addition, we saw improved gross margin performance in women versus last year. Categories and brands and women's apparel, the comp positive for the quarter both on a shifted and un-shifted basis included dresses active or Liz Claiborne brand or Worthington brand, outerwear, and cold weather accessories. Lastly, our junior's business saw double-digits sequential improvement in the third quarter versus the second quarter and was approximately flat on a shifted basis. Given our renewed focus on women and its recent performance, we are confident that our initiatives will continue to have a positive impact on this business moving forward also men's apparel outpaced the company comp with particular strength and big and tall active and seasonal categories. Our focus on special sizes continues to show results with our men's big and tall business up nearly 15% this quarter. This customer knows they can count on J.C. Penney to provide the fit they need and the style they deserve. And we have seen a very strong action to our new partnership with Shaft [ph]. Conversely, categories that underperform the company comp included big ticket areas and home such as appliances, women's accessories, and handbags. And looking at our third quarter, top line performance and monthly sales cadence a quarter store, excuse me, our quarter started off well in August, which perform better than our original expectations and delivered a positive comp on a shifted basis. However, we experienced softer sale during September and October, which both came in below our sales plan. We did see some positives in October when the weather broke. And we're encouraged by the performance and key categories such as outerwear, and cold weather accessories. Our third quarter comp sales declined was primarily driven by decreases and transactions and average unit retail offset partially by an increase in units per transaction. Geographically, the northeast and southeast were better performing regions while the southwest and gulf coast were our most challenging regions. Also, off note, we did see strong results in our stores that were previously co-tenant with Bon-Ton. Following their liquidation, we have seen these stores outpaced the balance of the chain. We believe this bodes well and speaks to the overall market share opportunities that exist from competitor clothing. As a reminder, starting in the first quarter of this year, credit income is now included in total revenues and was previously reported as an offset to SG&amp;A in prior period. For the third quarter, credit income was $80 million compared to $69 million in the third quarter last year, which exceeded our initial expectations. Our credit income this year has improved relative to our expectations at the beginning of the year, which is largely a function of an improvement in the credit customer portfolio. Cost of Goods Sold for the third quarter was 68.1% of net sales an increase of 210 basis points compared to the same period last year. The increase is primarily attributable to the clearance markdowns related to our decision to liquidate slower moving excess inventory during the quarter. In addition to the inventory liquidation I referenced here, our online margins were pressured as we continue to unwind certain factory ship partnerships related to our previous skew expansion strategy. We forecast online margins in Q4 to be pressured as well, but significantly lesser than the third quarter as we have made strong progress on these factory ships skew rationalization efforts. Overall, gross margin improvement remains a major focus for J.C. Penney. As we mentioned on our last call, we know that with the right actions and rigorous surrounding inventory management, we have opportunities to improve our current productivity and terms as well as effectively manage plan receipts, improved margin levels and optimize our working capital to increase free cash flow. One direct benefit of better managing our inventory that can provide significant gross margin upside is our ability to restore clearance selling margins back to historical levels. If you look at our accompanying slide deck from our Investor Relations website on Page 7, our year-to-date clearance margins are down approximately 20% versus historic and average results of positive mid-single digits. Of note and as shown in the chart, we were in a very similar situation on clearance margin at the end of fiscal 2013 and within two years, we are back to positive levels. The current reality is disappointing, but also demonstrates a significant opportunity for us to drive meaningful improvements in gross margin. As a reminder clearance typically represents a low double-digit portion of our total sales mix, meaning a similar improvement to 2015 levels would yield approximately 200 basis points of total company margin upside. This is clearly a huge opportunity for us. Looking ahead, we believe there are other areas of opportunity that can provide a meaningful benefit to gross margins, including shrinkage results. Improving shrink is a key priority. We are beginning to see some traction, on recent technology investments and staffing adjustment. And additionally, we have taken quick actions in Jill's arrival to support our stores with enhanced resources around high shrink locations and categories. Similar to clearance selling margins, we are significantly underperforming and shrink levels relative to normalize rates. By delivering shrink results as historic an industry standard level we can see significant total company margin upside on an annualized basis. That said, simply by better managing our inventory and shrink two things that are entirely within our control. We can deliver considerable margin and EBITDA upside. In addition to these margin opportunities, we continue to focus on driving sales improvement across higher margin apparel categories, leveraging our capabilities within our private brand and sourcing operations and further expanding and emphasizing our pricing analytics efforts. Moving now to expenses; SG&amp;A expenses for the quarter were down $37 million to $883 million or 33% of net sales compared to $920 million dollars or 32.7% of that sales for the same period last year. The reduction in expenses was primarily driven by lower corporate overhead and incentive compensation. As a reminder, given our adoption in the first quarter of the new FASB standards associated with pension accounting, we now include the current service cost component of pension expense, and income in SG&amp;A. All other components of net periodic pension cost and income are now recorded in a separate line item below operating income. Service cost does not impact our cash flow and is funded through our pension trust. The pension plan currently remained in an overfunded status. And as a reminder, no cash contributions are expected for the foreseeable future. Interest expense this quarter was $78 million. Adjusted net loss was $164 million or $0.52 per share for the third quarter of this year, compared to an adjusted net loss of 100 and $8 billion or $0.35 per share for the third quarter of last year. Third quarter adjusted net loss for 2018 and 2017 included the following items, $19 billion or $0.06 per share benefit this year related to other components of net periodic pension income compared to $2 million or less than $0.01 per share benefit last year; $11 billion or $0.03 per share this year related to restructuring and management transition charges compared to $52 million or $0.17 per share last year. $3 million or $0.01 per share both this year and last year related to the proportional share of net income from the Home Office Land joint venture, $2 million or less than $0.01 per share related to the tax impact resulting from other comprehensive income allocation, compared to $30 million or $0.10 per share last year. <p class="p p5" style="box-sizing: border-box; margin: 0px 0px 15px; font-family: Verdana, Arial, helvetica, sans-serif; font-size: 16px;"