Second quarter comparable sales at J.C. Penney were up slightly, but the department store retailer reported a larger net loss for the three months ended August 4.
In addition, the company also restated its full-year guidance downward, now expecting comparable store sales to be flat and a loss of between $1.00 to $0.80 per share, larger than the previously estimated loss of between $0.07 and $0.13 per share.
Comparable sales increased 0.3% for the second quarter. Net sales for the second quarter decreased 7.5% to $2.76 billion, compared to sales of $2.99 billion in the comparable quarter the previous year. Company officials said the decline was primarily the result of the closure of 141 stores in 2017. The retailer reported a net loss of $101 million, $0.32 per share, compared to a net loss of $48 million, $0.15 per share, in the same period the previous year.
Jeffrey Davis, J.C. Penney’s CFO, said the retailer during the second quarter adjusted its approach to inventory management from “buying to store capacity” to “buying and chasing” into demonstrated sales trends.
“Inventory receipts continued to outpace total sales performance this quarter due to prior purchase commitments,” he said. “As such, we took necessary actions to markdown and clear excessive inventory positions across many of our categories, which encompasses more than just seasonal product or fashion misses. We continue to take actions to right-size our inventory, better curate our assortment and provide a solid foundation that we can continue to build upon as we move forward.”
In addition, Ronald Tysoe, board chairman of J.C. Penney, said the process of filling the CEO position vacated recently by Marvin Ellison “is going well.”
“The board has met with highly qualified candidates who have expressed a strong desire to become the next leader at J.C. Penney,” he said. “The hiring of a new CEO is the top priority of the board of directors.”