In its fiscal third quarter ended October 27, J.C. Penney reported a net loss of $123 million, or 56 cents per share. Excluding the net gain on the sales of non-core assets, restructuring and management transition charges, and non-cash primary pension plan expense, adjusted net loss for the quarter was $203 million, or 93 cents per share, the company stated.
Third quarter comparable store sales declined 26.1% and total sales decreased 26.6% to $2.93 billion. Internet sales through jcp.com were $214 million in the third quarter, declining 37.3% from the year earlier, the company noted.
In commenting on the quarterly results, Ron Johnson, J.C. Penney CEO, said, “While the quarter overall was challenging, the performance of jcp’s new brands and shops reinforces our conviction to transform J.C. Penney into a specialty department store. Today, jcp is really a tale of two companies. By far the largest part of our store is the old J.C. Penney, which continues to struggle and experience significant challenges as evidenced by our third quarter results. However, the new jcp, centered around the shop concept, is gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity, which continues to give us confidence in our long-term business model.”
Zacks Equity Research noted that J.C. Penney failed to meet expectations in the lastest quarter as it has in the period previous as it reported consecutive sluggish results, ruining hopes for a near-term recovery, at least for the near term. J.C. Penny’s third quarter loss significantly exceeded the Zacks Consensus Estimate of financial analysts, which called for a third quarter loss of eight cents.
During the quarter, J.C. Penney opened shops under the Levi’s, Izod, Liz Claiborne, The Original Arizona Jean Co., and jcp brands. The company also opened 38 Sephora boutiques inside J.C. Penney stores, bringing the company total to 386. Currently, J.C. Penney has transformed about 7.2 million square feet of selling space into the shop format, the retailer stated.
During the third quarter, the retailer opened seven new J.C. Penneys, including four new stores and three relocations.