Photo Credit: Mike Mozart

J.C. Penney (JPC) is next in line in the retail industry to report earnings, as results will be announced tomorrow before the market opens. The Macy’s (M) competitor has boasted positive sales growth in the past few quarters and analysts are expecting the trend to continue. While the retail industry is hurting, and Macy’s earnings were everything short of good, JCP couldn’t be happier as its outlook has a bright spot because of a larger than expected increase in same store sales. The retailer is not what it used to be just several years ago and has been surpassing analyst expectations in 6 of the last 8 quarters, but this earnings report will plainly define the future of the company. This coming holiday season is ever important, as Estimize analysts are expecting to see a loss of 55 cents per share and revenue of $2.863 billion while Wall Street analysts are less optimistic, estimating a loss of 60 cents per share and revenue of $2.864 billion

.Yesterday, J.C. Penney announced growth in same store sales of 6.4% for the third quarter, to the surprise of investors and analysts alike. Under CEO Terry Lundgren the company has been slowly digging itself out of the failures of former CEO Ron Johnson. Through a reintroduction of item promotions, the gentrification of brands carried, a partnership with Sephora, an advanced online shopping site which employs a “pickup in store” feature, and a serious focus on technology, all while still closing locations, it can be said that JCP might be on the right path and is positioning itself as a serious threat to Macy’s. The Plano, Texas based retailer has been experiencing increased same store sales figures over the past few quarters, but what remains to be seen is whether or not these growth expectations can be topped consistently

.Furthermore, there is a plan to lay off 300 executives from headquarters. In theory, a move like this would save costs and boost profits and earnings, but investors did not react positively as shares dipped 15% last month. It appears as though the market reacted negatively because of operational concerns and insecurity regarding the long and short term plans for the firm

JCP data by YCharts

Retail companies are still under fire as Macy’s and Nordstrom’s stocks dipped 38% and 19% since the beginning of the year. JCP is still a major player in the industry and must be watched very closely as it begins to gain a few steps on Macy’s.