J.C. Penney earnings worse than expected, but hope endures
J.C. Penney Co. on Tuesday reported yet another round of dismal quarterly earnings, disappointing Wall Street as the struggling retailer pushes through yet another turnaround effort pocked by infighting and investor concern.
In its second quarter (the three months ending Aug. 3), the Plano, Texas-based company said it suffered a net loss of $586 million, or $2.66 a share, from a loss of $1.47 million, or 67 cents a share 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 period in 2012.
The company blamed strategies instituted during the short tenure of prior chief executive Ron Johnson, the Apple alum who left his J.C. Penney post in April.
His merchandising and promotional tactics failed, while implementing his vision of revamped home goods departments “has been more challenging and is taking much longer than originally planned,” J.C. Penney said.
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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, improved slightly from the first quarter to settle in an 11.9% slump. During the second quarter of 2012, the gauge tanked 21.7%.
Though “there are no quick fixes to correct the errors of the past,” J.C. Penney Chief Executive Myron Ullman said in a statement, executives “have identified the challenges [and] put solid plans in place.”
In late morning trading in New York, the company’s stock was up 1.4%, or 18 cents, to $13.40 a share. So far this year, the stock has sunk 33%.
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 response, J.C. Penney expressed its “overwhelming support” for both executives.
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