J.C. Penney loss widens as revenue falls 12%
J.C. Penney Co. on Tuesday reported yet another round of dismal quarterly earnings, disappointing Wall Street as the struggling retailer pushes through a turnaround effort pocked by infighting and investor concern.
In its second quarter, which ended Aug. 3, the Plano, Texas company said it had a net loss of $586 million, or $2.66 a share, compared with a loss of $1.47 million, or 67 cents, a year earlier. Analysts had expected the per-share loss to be less than half that size.
Revenue slid nearly 12% to $2.66 billion from $3.02 billion during the same three-month period in 2012.
The company blamed strategies instituted during the short tenure of prior Chief Executive Ron Johnson, the Apple alum who left his Penney post in April.
His merchandising and promotional tactics failed, and implementing his vision of revamped home goods departments “has been more challenging and is taking much longer than originally planned,” J.C. Penney said.
However, the retailer also pointed to several promising signs. Sales improved each month of the quarter, and the back-to-school season was encouraging.
Same-store sales, which only factor in revenue from stores open at least a year, fell less dramatically in the quarter — 11.9% compared with a 21.7% drop a year earlier.
Though “there are no quick fixes to correct the errors of the past,” Penney CEO Myron Ullman said in a statement, executives “have identified the challenges [and] put solid plans in place.”
The company’s shares Tuesday rose 6%, or 79 cents, to $14.01. The stock has sunk nearly 30% this year.
The chain is now gearing up to head into the all-important holiday season, but in recent weeks, its upper ranks have been shaken by instability.
A week ago, activist investor Bill Ackman of Pershing Square Capital Management relinquished his board of directors seat after a public spat with the company. Ackman had pushed for a speedy replacement of Ullman as well as Chairman Thomas Engibous. In a statement, Penney’s board expressed its “overwhelming support” for both executives.
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