J.C. Penney narrows loss but sales continue to fall; cites turnaround ‘progress’
J.C. Penney put a positive spin on another tough quarter and even boosted its full-year profit outlook.
The embattled department store chain reported that its net loss narrowed to $93 million, or 29 cents per share, in the quarter ended Nov. 3, from $151 million, or 48 cents a share, in the year-ago period. Excluding one-time charges, Penney lost 30 cents a share, which was less than the loss of 55 cents a share that analysts had expected.
Sales fell 10.1% to $2.38 billion, missing expectations for $2.51 billion.
Same-store sales fell 9.3%. Adjusted same-store sales, excluding the impact of Penney’s exit from major appliance and in-store furniture categories online and at Penney stores, were down 6.6%, better than an expected drop of 7.7%.
In a statement, Jill Soltau, who took the reins as Penney CEO about a year ago, said the chain made “significant progress on our efforts to return J.C. Penney to sustainable, profitable growth” during the quarter.
“We are beginning to see results – both in our numbers and how we operate as a business – from the early implementation of our Plan for Renewal, which is focused on driving traffic, offering compelling merchandise, providing an engaging experience, fueling growth, and building a results-minded culture,” she said.
Penney recently unveiled a new store concept, in Hurst, Texas, that offers a more modern and experiential shopping experience, complete with a fitness studio, a barber and café. A more streamlined layout makes the store easier and more convenient to shop.
“Everything from the logo to the layout has been revamped and the result is a modern shopping experience that is both inspiring and engaging,” commented Neil Saunders, managing director, GlobalData Retail.
But he noted that the new concept is such a radical departure from the JC Penney of old, that rolling it out across the chain would be “incredibly expensive.”
“We doubt that J.C. Penney has the financial muscle or capital to embark on such an ambitious program,” he said. (For more commentary, click here.)
Penney raised its expectation for adjusted earnings to now exceed $475 million for full-year fiscal 2019, up from its previous range of $440 million to $475 million. It still expects same-store sales to be down 7% to 8%.