Penney Q4 sales miss; cuts 360 jobs, shakes up digital management
J.C. Penney on Friday reported sales that fell short of analysts’ expectations. It also announced a job reduction and management shakeup.
Revenue rose 1.8% to $4.03 billion, up from $3.96 billion last year. Analysts had forecast sales of $4.05 billion. Same-store sales increased 2.6%, missing estimates of 2.7%.
Net income was $254.0 million, or 81 cents per share, up from $192.0 million, or 61 cents per share, year-over-year. The quarterly results included a $75 million benefit from recently passed federal tax legislation Adjusted EPS was 57 cents, which was 10 cents above expectations.
“During the fourth quarter, we delivered our strongest positive sales comps and achieved our largest gross margin improvement for the year, said CEO Marvin Ellison.
"In 2018, we will intensify our market share efforts in appliances, mattresses and furniture, while continuing to take steps to modernize our apparel assortment and omnichannel."
Job Cuts: Penney said it has eliminated 360 jobs, including 130 at its headquarters, in a move that will save the company up to $25 million annually. The retailer said the restructuring has “eliminated bureaucracy, reduced support positions and reallocated store headcount to customer-facing positions.”
In the management changes, Mike Amend, executive VP of Penney's omnichannel business, is out. Therace Risch will assume omnichannel responsibilities as both CIO and chief digital officer.
In addition, Joe McFarland has been named executive VP and chief customer officer, a newly expanded role that includes responsibility for merchandising, as well as leading all J.C. Penney store operations. Both McFarland and Risch will report to Ellison.
“As the company continues to make progress on its strategic framework and implement new processes and organizational efficiencies, it is imperative that we maintain a thoughtful approach to managing expenses, while effectively supporting the needs of the business," said Ellison.
For the full year, total net sales decreased (0.3) % to $12.51 billion compared to $12.55 billion last year. Comparable sales increased 0.1 %. The slight decline in total net sales was primarily due to store closures in 2017, most of which closed in the first half of the year, and was partially offset by incremental sales for the 53rd week, Penney said.
Penney posted a net loss of $116 million for the year, compared to net income of $1 million, or $0.00 per share last year. This reduction was driven primarily by restructuring charges associated with the fiscal 2017 store closures and voluntary early retirement program.
The retailer expects 2018 same-store sales to be flat to up 2%, and adjusted EPS of 5 cents to 25 cents, which was below Street expectations.
Revenue rose 1.8% to $4.03 billion, up from $3.96 billion last year. Analysts had forecast sales of $4.05 billion. Same-store sales increased 2.6%, missing estimates of 2.7%.
Net income was $254.0 million, or 81 cents per share, up from $192.0 million, or 61 cents per share, year-over-year. The quarterly results included a $75 million benefit from recently passed federal tax legislation Adjusted EPS was 57 cents, which was 10 cents above expectations.
“During the fourth quarter, we delivered our strongest positive sales comps and achieved our largest gross margin improvement for the year, said CEO Marvin Ellison.
"In 2018, we will intensify our market share efforts in appliances, mattresses and furniture, while continuing to take steps to modernize our apparel assortment and omnichannel."
Job Cuts: Penney said it has eliminated 360 jobs, including 130 at its headquarters, in a move that will save the company up to $25 million annually. The retailer said the restructuring has “eliminated bureaucracy, reduced support positions and reallocated store headcount to customer-facing positions.”
In the management changes, Mike Amend, executive VP of Penney's omnichannel business, is out. Therace Risch will assume omnichannel responsibilities as both CIO and chief digital officer.
In addition, Joe McFarland has been named executive VP and chief customer officer, a newly expanded role that includes responsibility for merchandising, as well as leading all J.C. Penney store operations. Both McFarland and Risch will report to Ellison.
“As the company continues to make progress on its strategic framework and implement new processes and organizational efficiencies, it is imperative that we maintain a thoughtful approach to managing expenses, while effectively supporting the needs of the business," said Ellison.
For the full year, total net sales decreased (0.3) % to $12.51 billion compared to $12.55 billion last year. Comparable sales increased 0.1 %. The slight decline in total net sales was primarily due to store closures in 2017, most of which closed in the first half of the year, and was partially offset by incremental sales for the 53rd week, Penney said.
Penney posted a net loss of $116 million for the year, compared to net income of $1 million, or $0.00 per share last year. This reduction was driven primarily by restructuring charges associated with the fiscal 2017 store closures and voluntary early retirement program.
The retailer expects 2018 same-store sales to be flat to up 2%, and adjusted EPS of 5 cents to 25 cents, which was below Street expectations.