JC Penney's quarter was a complete disaster
Investors flee the stock after the company sees a huge plunge in sales from a year earlier.
Updated Feb. 28, 1:20 p.m. ETJ.C. Penney's (JCP) holiday quarter was an absolute bloodbath, with the company reporting half a billion dollars in losses over just three months.
The fourth-quarter loss of $552 million was the worst of the year, and another sign for investors that life under CEO Ron Johnson is not going well. Sales in the quarter -- which contained the all-important holiday period -- fell a jaw-dropping 28.4% from a year earlier.
Even worse was the 31.7% revenue drop at stores opened at least a year -- an important measure for the retail industry. Analysts expected a drop of 26.1%.
It's a terrible trend for Johnson, and one that he did not foresee. When he took over Penney more than a year ago, he told investors to expect some rocky moments. But he predicted that the company would grow stronger throughout 2012 and post a profit for the year, according to The Wall Street Journal.
That simply did not happen. Instead, the company bled money as revenue plunged to the lowest levels since at least 1987, Bloomberg reports. Its cash position fell 38% to $930 million. Shares plunged 50% over the fiscal year ending Feb. 2.
Investor patience is running thin. The stock tanked in after-hours trading as shareholders reacted to the quarterly news, and then Thursday shares fell more than 14%.
Johnson took some blunt criticism on Twitter. Here's some of the reaction to the quarter:
- "If Johnson just did nothing -- like he could have watched YouTube all day, all year -- things would be better than they are now for $JCP." -- Rocco Pendola, TheStreet
- "$JCP same-store sales down 31.7%. . . that's not easy to do." -- CNBC anchor David Faber
- "The old model in JCP was broken too. Does anyone recall this was a decaying franchise before their effort to reinvent? Can't go back." -- Michael Khouw, trader
- "It is clear that Ron Johnson was not the right person for the job. Trying to make $JCP into $AAPL was a bad strategy." -- Mark Holder, investment advisor
Bring back the JCPenney from 2 years ago. I have shopped at this store for many, many years either on site or online. The drastic changes have slowed down my shopping considerably.
Love the old JCP!!!! Doorbuster sales, coupons for free shipping, or 20% off entire order online. Where did it all go? Those ads and mailers were incentive to shop before the deadline.
Sears tried the same strategy in the late 80's/early 90's with the same disastrous results. The CEO should have done his homework before implementing this strategy. People like sales and coupons but running new sales every couple of days is expensive in salaries alone. Bring back the favorite brands, stop with all trendy, one season, teen clothes and remember that those of us older than 50 are the ones with the disposable income not the teens. Go back and look at the Sears history for the same merchandise and don't make the same mistakes.
Ron Johnson is a thief and robs the company every day like a shoplifter.
He works a 3 day work week, flies the corporate jet to work every week and stays at a $3,000.00 a night hotel suite.
If he doesnt care about the company why should we?
JC Penny is going to crash and burn its just a matter of what month?
I am going to their store right now and steal as much as I can like Ron Johnson does!!!
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