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.

By Kim Peterson Feb 27, 2013 6:26PM
Customer Service counter at the J.C. Penney store in Westminster, Colorado on February 20, 2009 (RICK WILKING/Newscom/RTR)Updated Feb. 28, 1:20 p.m. ET

J.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

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849Comments
Feb 28, 2013 3:50PM
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Oh... J.C. Penney, you could take an average normal American off of the street, and I think they could run this business better than your current CEO. You need to bring back the coupons, just for the advertising. I was in my local J.C. Penney's the other day and they still had Halloween items and Christmas decorations..... Come on, it is the end of February and you still have not marked these items down to under a $1??? I am tired of looking at your purple, blue, and red boxes..... Please use your brains. I just feel bad for the founder, Mr. Penney, because I know that this is not what he intended for his business to do! He liked to make cash; not lose it!

Feb 28, 2013 3:49PM
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JCP is a store for 60 year old women who are 5'4" tall and wear a size 8.  It is also a store for men who wear suits to work.  (And average sized levis).   That about sums JCP up.  If you don't fit into their catagory, you are probably getting your stuff at better stores or on line.  That's where I now get my husband's jeans (I used to get them at JCP) and I've never been able to find clothes there (other than their catalogs) and frankly, if I have to go to a catalog I'm going to go on line or go to a store where I don't have to order something.  So frankly at this point, if they close....oh well. 
Feb 28, 2013 3:48PM
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Our local Penney's store eliminated both Customer Service counters in the Men's Department.  Male customers (or anyone buying items in the Men's Dept.) must now walk the full length of the store to cash out at one of three remaining Customer Service counters in the various Women's Departments.  One of the Men's Dept desks they eliminated was in the Suit Department!  How do they expect anyone to purchase a suit with no assistance/fitting/alterations?

 

Men's Wearhouse and Jos A Banks from now on.

 

 

Feb 28, 2013 3:45PM
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Shopped at JCP for two decades but a little over a year ago I vowed never to darken the doors of a JCP store due to the poor customer service from everyone behind the scenes.  They totally ignored my request for information, told me it was my problem or didn't even answer.  Hope they go belly up - the sooner the better.

Feb 28, 2013 3:44PM
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Time for the board to go find someone from the retail industry and grew up in merchandising. This guy was lucky at Apple. he had a cult following. This is mass retail and deserves a sharp retailer. We have seen a few that have been swallowed up by Macy's. Forget the logo changes and put a person back in with the retail experience.

 

It would be a shame to see an institution lost. JC Penney's is Not Macy's nor is it Target. It has to find that lower to middle niche it once served and merchandise worthy.

 

I think the fact that Mr Johnson works very little and spends time at the Ritz says something about this guy. Employees follow the leader.

Feb 28, 2013 3:43PM
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How stupid is JCP management?  You put a lesbian as a spokesperson for a family oriented store.  Really?  I wont shop JCP as long as you cater and promote homosexuality.  I dont shop Target, unless I have  to because they do the same in supporting only gay and lesbians groups.  Target supports homosexuality but wouldnt contribute to helping burned children.

 

You get what you promote and you promote homosexuality and families wont support you.

 

Now you've made your bed, so lie in it and I will keep my money for businesses who arent putting lesbians and homos in as their spokespeople.  I do not support homosexuality, it's a cop out for most of them and they are demanding more than they deserve.

Feb 28, 2013 3:40PM
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Haven't shopped at JCP since all the changes.......if it ain't broke,it don't need fixin. Johnson is a putz and has no idea what the consumer wants.
Feb 28, 2013 3:39PM
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My wife and I were loyal JC Penney customers for dozens of years, buying everything from appliances to televisions to clothing.  For the past few years, it has been going downhill, with the selection changing to trendy clothing (I am a big and tall guy who wants shirts that fit), and the selection for women over 50 is zero!  It looks like stuff Aunt Bee would have worn on the Andy Griffith show.  I got a gift card to JCP for Christmas and have gone twice to use it, but left disgusted when I couldn't find anything that I wanted. Wow.  The CEO needs to leave, and bring back what the customers want...good merchandise and regular sales events. 
Feb 28, 2013 3:32PM
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There are still more English Speaking americans than Mexicans - Get rid of courting to them and the mexican music and you might get the English speaking people back.
Feb 28, 2013 3:32PM
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Why haven't they gotten rid of this failure of a CEO. LOOK WHAT HE'S DONE TO MY FAVORITE STORE!!!!!!!!!
Feb 28, 2013 3:28PM
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Hmmmm, why did I stop shopping at JCP.

Ran out of money...

Second hand shops...and then only the cheapest ones for the clothing items..

 

The shareholders got all the attention at our company, too, no raises last year to those that actually do the work to produce whatever profit is made...so...our little family really can't shop at JCP or Sears or any of the box stores, really.

 

But, as long as the CEOs can laugh their way to the bank, who cares, right? Who needs the silly middle class money, anyway. Right?

Feb 28, 2013 3:26PM
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I went to JCP often but after the change I have no desire.  It is not the same don't know if I will change my idea about going. Don't think so if they do not make changes back.  So sad :(.

 

Feb 28, 2013 3:21PM
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I used to love JCP!  Im a tall guy and every time I go into the store NOTHING for a person 6'6".  If I weighed 350 lbs and was 5'6" then they have merchandise!  Even the catalog has very little for extra tall guys.  Give me some QUALITY choices in Extra Tall and I'll be back. 

 

PJ's no longer in Extra Tall.

Slacks have very few items either!

Feb 28, 2013 3:16PM
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I like all the other posts on here used to LOVE JcPenny, and I still have a hard time calling it JCP, but now it is awful and depressing to even walk in the store.  It feels like walking through a store closing sale in every department; there are NO decorations on the walls, and the awful flourescent clothes?  WHO wears that crap?  I am 47 and have shopped at JCP since I was a child, I bought all my business clothes there as an adult and haven't stepped foot in that store for two years other than to go to Sephora, THAT is the only reason to walk through their doors now. 

 

Fire this guy and bring back the staple we all know and loved, the old JC Penney. 

Feb 28, 2013 3:15PM
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I stopped shopping at Kohls due to their high prices now shopping at Penneys reasonable pricing on every thing
Feb 28, 2013 3:15PM
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I hear the CEO only works a few days a week.
Feb 28, 2013 3:11PM
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On December 21st (the Friday before Christmas) my husband and I went to our local JC Penney store in Appleton, Wisconsin at 7:50 pm.  Got to the dept. we wanted to shop in only to be greeted with a PA announcement that the store would be closing for the day in 5 minutes.  Are you kidding me!!   Christmas is only 4 days away and you are closing at 8:00 pm. 

 

Dear CEO... those days leading up to Christmas are also considered part of your "money-maker".   We immediately left the store and went to shop at Younkers (which is another "anchor" store in our lovely mall) and finished up our shopping.

 

Loved the "old" store and not at all liking what JCP has become.

Feb 28, 2013 3:11PM
Feb 28, 2013 3:10PM
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WHO EVEN CARES. People should focus on their own finances and stop worring about big businesses. Clearly the CEO's financial issue with JC Penney stems from a deeper financial issue within himself. Individuals should spend their time time worrying about their own wealth-building abilities and not judge someone else for theirs.
Feb 28, 2013 3:05PM
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Wenr downhill when they stopped being a full line store (hardware, major appliances, etc).
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