JCP Turnaround In Holiday Homestretch
Tuesday, November 18, 2014 at 11:07AM November 13, 2014
J.C. Penney is in the final phase of its turnaround and the company's stores are customers' preferred destination for great style, quality and value, according to company CEO Mike Ullman.
Those comments came after J.C. Penney said its third quarter same store sales were flat and it forecast a fourth quarter comp increase of 2% to 4%. Total sales in the quarter ended November 1 declined slightly to $2.76 billion from $2.78 billion.
The company reported an operating loss of $54 million, but that was a massive improvement from the prior year when the company reported a staggering operating loss of $401 million. Other positives from the quarter were gross margins which expanded to 36.6% of sales, compared to 29.5% in the same quarter last year, thanks to strength in the home and fine jewelry categories. The company also reduced expenses and reduced inventories by 10.4%.
"This quarter shows the progress we are making in the final phase of J.C. Penney's turnaround. We continued to significantly improve the profitability of our business with gross margin expansion of 710 basis points, a $342 million improvement in EBITDA and bottom-line financial results that exceeded even our own expectations," Ullman said. "Like most retailers, following a strong start to the back-to-school season, sales did slow in September and October as unseasonably warm weather hindered the sale of fall goods."
Ullman's observation on the third quarter was that during what he called "appointment shopping periods" such as back to school and holidays, J.C. Penney is the customers' preferred destination for discovering great style, quality and value.
"This year, we are confident customers will once again choose J.C. Penney for meaningful holiday gifts that fit their family budget. We are well positioned to complete this holiday season and I would like to thank our associates for their hard work, warrior spirit and commitment to delivering an exceptional customer experience every day," Ullman said.
Source: Retailing Today
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