J.C. Penney Q2 Loss Widens, Sales Fall 14%
J. C. Penney reported fiscal Q2 net sales of $2.66 billion compared to $3.02 billion in the fiscal second quarter of 2012. For the first six months ended August 3, 2013, net sales were $5.3 billion, down 14% from $6.2 billion a year earlier.
The company said for the second quarter it incurred a net loss of $586 million compared to a net loss of $147 million for the same three months in 2012. The cumulative net loss for the first six months was $934 million compared to $310 million for the same period in 2012.
The following highlights were excerpted from the news release:
- Comparable store sales declined 11.9% in the quarter, and were negatively impacted by the company’s failed prior merchandising and promotional strategies, which resulted in unusually high markdowns and clearance levels in the second quarter.
- In addition, the lengthy renovation and disappointing re-merchandising of its home departments adversely impacted the company’s comparable store sales during the second quarter. Overall, the performance of the company’s home division had a 240 basis point impact on its comparable store sales for the quarter.
- Despite these challenges, comparable store sales for the quarter improved sequentially by 470 basis points when compared to the first quarter of fiscal 2013. In addition, sales results improved sequentially each month within the second quarter, a trend the company expects to continue through the back half of the year.
- Gross margin was 29.6% of sales, compared to 33.2% in the same period last year. Gross margin was negatively impacted by lower than expected sales, and a higher level of clearance merchandise sales during the quarter including merchandise carried over from the first part of the year.
Myron E. (Mike) Ullman, III, chief executive officer of jcpenney, said, “Since I returned to jcpenney four months ago, we have moved quickly to stabilize our business – both financially and operationally – and we have made meaningful progress in important areas of the business. There are no quick fixes to correct the errors of the past. That said, we have identified the challenges, put solid plans in place to address them and have experienced and capable people in key roles to do so.”
To read the entire J.C. Penney news release, click here.
Previously on abfjournal: Ackman Resigns from J.C. Penney Board, August 13, 2013