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 27, 2013 7:11PM
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What will it take to FIRE THIS GUY and bring back the best brands such as St. John's Bay!!!!!!!!!!!!!!!!!!!!!!
Feb 27, 2013 7:47PM
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Typical of the CEO of today, out of touch with the core client and destroying the business.  I wonder if he will get a bonus for this debacle.  I used to be a loyal Penney customer, I haven't bought one thing there in over a year.  The place is unrecognizable!
Feb 27, 2013 9:07PM
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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.

Feb 27, 2013 9:13PM
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They need to bring back better quality clothing. The items in there now are nothing but cheaply made junk.
Feb 27, 2013 6:38PM
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This guy needs to be fired!  JC Penney's was really a much better store before he took the reins.  Hurry up Board Of Directors, do your job!
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Shopped JCP at least twice a week before Johnson.  Haven't shopped there since.  I walk through the stores and just shake my head.  There's nothing  of interest or value in there anymore.

 

Feb 27, 2013 7:26PM
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What a total waste. An americon icon is going down because of a poor ceo.
Feb 27, 2013 9:18PM
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I shopped JCP for Christmas and purchased some jewelry. I shopped their clothing department and found out I was 30 years to old to want to buy any thing there for people who are as old as myself. I grew up a JCP kid since I was 6 yrs.old. But todays Penney's is not like forty years ago when they offered something for every age group. 
Feb 27, 2013 9:00PM
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If you've been to there store recently you will notive that they are trying to target the size 2-6 with very little sucess. Wish  they would go back to being a store for the average person.
Feb 27, 2013 9:15PM
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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.

Feb 27, 2013 8:55PM
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As a customer I told them in a survey this would not work, I live in the desert and they were featuring coats, boots and so called designer styles not for the customer here, They also did away with their catalog, and large men items.
Feb 27, 2013 7:51PM
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why is this a-hole still here ? should have been FIRED , long time ago !!   who is he blowing ??? 
Feb 27, 2013 9:18PM
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Have you been to a JCP lately? The experience pretty much sucks. I went with my daughter in the Fall to get some school clothes for her, and all they had were racks and racks full of summer clearance. What? I guess the corporate offices were too busy watching YouTube videos, 5 million viewings per month, to actually order stuff that was relevant for that time of year. There is an old saying, "A  fish rots from its head."
Feb 27, 2013 9:11PM
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Normally a company would have given a new hire a 90-day probation.  This probation period would decide if the person stays or go.  In this case, Johnson is a no-go and should be fired.  I use to shop at JCP but since the change, the store became a maze and tiring to shop.  Send him packing minus any bonuses promised for he is a complete failure to boot.
Feb 27, 2013 8:49PM
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I wonder if maybe he got some cash (or a lot of it) from some competitor, because for the shareholders to even allow this clown to stay on board for this long, means there is something wrong here. Get rid of him now before the company totally implodes!
Feb 27, 2013 9:11PM
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In 1996 I applied for a job at JCP. In the interview, the store manager told me that I would be working for minimum wage and only twenty hours per week. He also stated that I need to wear suits to work and that the only suits authorized for wear were ones bought at JCP. Even with a twenty-percent employee discount, each suit would have cost $150.00. Do the math and you'll see that JCP expected me to spend my first three week's pay on work clothes (BTW, minimum wage was $4.25 in 1996).

Two years later, in 1998, after getting a better job, I applied for a JCP charge card. I was denied. When I called corporate they basically said that the bank that backs the JCP charge card requires card members to earn $100,000 per year and own their own homes. Talk about absurd for a card with no more than a $1000.00 credit limit.

In 2011 and 2012 I was job hunting and once more applied for employment at JCP (I was desperate, okay?). The automated computer denied me not once, not twice, but three times. Honorably discharged Army Veteran and owner of a resume of about ten years of customer service experience and about five in retail sales. Denied for a barely above minimum wage job. I guess I was "over qualified." At least that's what I told myself so I wouldn't be bothered by it.

Why am I telling you this? Because it's personal, and not professional, when I say that I hope that JCP goes under. I HATE this company. I feel for the employees, however; Walmart is hiring. As JCP is just ten percent above Walmart in price, quality, and "prestige," the former employees should fit right in. 

And, yes, please call me a "hater." :) 
Feb 27, 2013 8:15PM
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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!!!

Feb 27, 2013 8:49PM
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Waist deep in the big muddy,  and the big fool says to push on.

-Pete Seeger

Feb 27, 2013 9:08PM
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They need a better delivery system, it take too long to get and order. It appears that they ship from stores, than from  a central warehouse.No one waits anymore.
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