J.C. Penney Co. reports $87-million fourth-quarter loss
J.C. Penney Co. is hoping that its new turnaround strategy makes its most recent quarter – and its $87-million loss – the retail chain’s last dour quarter.
The company, armed with a fresh chief executive and a retooled pricing framework, said its fourth-quarter slide was caused by long-ingrained bad habits – such as deep, rolling discounts and outdated stores -- as well as by the effort to improve on them.
In the period ended Jan. 28, J.C. Penney fell to a loss of 41 cents per share from a $271-million profit, or $1.13 per share, in the same quarter a year earlier.
Same-store sales at locations open more than a year slumped 1.8% while online sales slipped 3.1%. Overall revenue was down nearly 5% to $5.42 billion as middle-income shoppers tried to wait out the fickle economy.
But J.C. Penney’s new Chief executive Ron Johnson, who left his executive post at Apple Inc. in November to join the retailer, said Friday in a conference call with analysts that he plans to “throw open the windows and let in some fresh air.”
On Feb. 1, the department store instituted a simpler pricing method dubbed “fair and square,” replacing the hordes of sales it used to scatter throughout the year. Prices on all products were lowered, with some items subject to monthlong sales. The chain will also offer clearance deals on the first and third Fridays of each month.
Also, the chain’s locations will begin featuring a store-within-a-store model, with mini-boutiques highlighting products from brands such as cosmetics maker Sephora and fashion label M by Mango.
And in December, J.C. Penney shelled out $38.5 million acquiring a 16.6% share of lifestyle magnate Martha Stewart’s company while also cementing a 10-year deal to set up special displays of Stewart-branded housewares in its stores. Macy’s, which also has a deal with Stewart, promptly sued to block the deal.
J.C. Penney’s sales for the full fiscal year were down 2.8% to $17.3 billion. The company suffered a $152-million loss, or a loss of 70 cents a share, from earnings of $389 million, or $1.63 per share, the previous year.
The company’s stock slipped less than a percent, or 30 cents, to $41.63 in afternoon trading in New York.