J.C. Penney Addresses Critics; Pleased With Turnaround Progress

J.C. Penney(JCP) issued a press release Thursday morning saying it is pleased with its turnaround initiatives and that it anticipates positive same-store sales trends through the rest of the year.

The announcement comes amid mounting concerns about the struggling retailer as it considers raising fresh capital heading into the holiday season.

Shares rose 1.8% to $10.30 in premarket trading, reversing earlier premarket losses. The stock slumped 15% on Wednesday and closed at $10.12, a 13-year low.

UPDATE: Shares turned higher Thursday morning after CNBC reported CEO Myron “Mike” Ullman told investors that he doesn’t see conditions this year where J.C. Penney would need to raise liquidity. The stock popped on that report and was recently up 4.5% to $10.55.

Earlier this week, debt analysts from Goldman Sachs(GS) offered a downbeat view of the retailer’s prospects, which contributed to the stock’s recent slump. The firm said weak performance, particularly in J.C. Penney’s home department, could put pressure on the retailer’s available cash in the quarter that ends in October.

Here’s the release from J.C. Penney:

“In response to inquiries, J.C. Penney said today that it is pleased with its progress thus far in the Company’s turnaround efforts and the traction its initiatives are starting to  achieve.  Moreover, the Company said it is starting to see greater predictability in its performance across many areas.

“The Company continues to be encouraged by improvements in purchase  conversion both in store and on jcp.com, primarily due to being back in stock in key items and sizes the customer expects to find at J.C. Penney. Overall sales on jcp.com continue to trend double digits ahead of last year.

“The Company still anticipates it will experience positive comparable store sales trends coming out of the third quarter and throughout the fourth quarter of 2013.”

The struggling department store chain is exploring the possibility of borrowing more money with the help of investment bankers elsewhere at Goldman Sachs, The Wall Street Journal reported citing people familiar with the matter. The aim appears to be to build a cushion in case the company’s turnaround efforts stall out over the key year-end shopping season.

Mr. Ullman has been trying to revive Penney after a disastrous year and a half under former Apple(AAPL) executive Ron Johnson. Mr. Johnson cut back discounts and did away with popular house brands without first testing how those moves would be received. The strategy drove away customers and plunged Penney into the red.

–Ben Fox Rubin contributed to this report.