J.C. Penney Reports ‘Solid Progress’ with Turnaround
J. C. Penney reported that it is making solid progress in its turnaround and provided an update on the company’s operating performance and key initiatives underway to return to profitable growth.
Last week, J.C. Penney closed a public offering of 84 million shares of common stock that generated approximately $785 million in net cash proceeds. The company’s year-end liquidity is now expected to be in excess of $2 billion, taking into account the net proceeds of approximately $785 million from the offering, as well as the previously disclosed expectation of $1.3 billion of year-end liquidity including the undrawn portion of the company’s credit facility.
Mike Ullman, chief executive officer said, “Over the last six months, we have made significant strides and are now seeing positive signs in many important areas of the business, in spite of what continues to be a difficult environment for consumers and retailers in general. While pleased with the improving trends and more predictable performance, we are still in the early stages of the turnaround and will maintain a relentless focus on achieving our long-term goals for the benefit of our customers, associates and shareholders.”
The retailer said getting the new Home strategy up and running has been more challenging than originally planned. To date, the company has re-opened all but a handful of its 505 new Home departments. The merchandise assortment, shopping environment and price points have not resonated with customers, and sales trends remain weaker in stores. In-line with customer preferences, the company is working aggressively to create a more balanced assortment between modern and traditional home furnishings, with opening price points and an easy shopping environment, which includes remerchandising the home store by classification in key areas.
Other highlights from the news release included:
- September comparable store sales continue improving trend; up 580 basis points over August and down (4.0) % from last year
- Sales on jcp.com up 25.3 % in September and 10.8 % in August
- Actions to reconnect with core customer show signs of success, especially during promotional events
- Customer service scores are at all-time highs for the company
- Inventory in key private brands and basics restored to appropriate levels
To read the entire J.C. Penney news release, click here.
Previously on abfjournal: J.C. Penney Seeking $1 Billion from Share Sale, September 27, 2013