J.C. Penney gets some rare good news
The struggling chain sees its first comparable sales increase in nearly a year. Shares rise 5% in response.
By Laurie Kulikowski
The Plano, Texas-based department store said that October same-store sales rose 0.9 percent, up 490 basis points from September, and the first positive comps since December 2011.
Sales on jcp.com jumped 37.6 percent in October from last year, "a continuation and acceleration of the positive trend in the company's online business," J.C. Penney said.
The retailer added that customers are responding favorably to promotional events and improved inventory levels of familiar brands as "conversion" continued to improve in October compared to last year.
Shares rose nearly 5 percent to $8.08 in Thursday trading.
"JCPenney has made significant progress in addressing the challenges it faces, and we believe the company is on the right track to return to long-term profitable growth," CEO Myron (Mike) Ullman III said in a statement. "We are proud of our October sales improvement, which we achieved despite the federal government shutdown and a challenging consumer environment. Not only did we deliver positive same store sales for the first time since December of 2011, we also saw significantly improved sales trends in home and men's apparel, as well as women's accessories."
J.C. Penney continues to re-merchandise and reconfigure its home department both in stores and online. The changes are beginning to resonate, the company said, as its home division saw the largest percentage sales increase company-wide in October. Sales of home merchandise online were up more than 50 percent from last year and were almost half total online sales in October. The categories of women's, men's and children's apparel were also strong performers online during the month.
The company also opened 30 new Sephora stores inside J.C. Penney locations in October, bringing the total to 446 locations.
Still, the company cautioned that gross margin in the third quarter was hurt by lower clearance margins due to the overhang of inventory from the first two quarters of the year, higher levels of clearance units sold, as well as the company's transition back to a promotional pricing strategy. However, gross margin showed sequential improvement within the quarter, with October representing the highest margin levels of the quarter.
J.C. Penney will report third-quarter earnings on Nov. 20.
"The success we've had to date in reconnecting with our customers is energizing the teams throughout our organization, enabling us to achieve customer service scores that are at an all-time high for the company," Ullman said. "As we look ahead, we are fully prepared to execute our aggressive plans for the holidays, including opening at 8:00 pm on Thanksgiving Day. We will soon be unveiling new marketing to better communicate the unique value and stylish merchandise assortment we offer. We expect the holiday season to be extremely competitive, and we are ready to win."
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perhaps it is because they re stocked their stores and returned to many lines that their loyal multi generational customers were happy with....like st Johns bay etc....If people want upscale they will shop at Macy's etc....JC Penney has historically been known for value and stylish yet not "edgy" merchandise.....how do I know; I worked for them all through college and they had consistent customers year after years until they attempted to be something they are not! Happy to see they may be turning a corner!
....J.C. Penney is a quality organization.................
So glad to see that they improving their sales and customer traffic. They have been a strong retailer for over 100 years and deserve to get back on their financial feet. Competition is good for us...the consumers!!
Off to a great Christmas Season!!
I think this Mike Ullman should thank Ron Johnson. The numbers were so bad under him the comps had no where to go but up! .9% is not a turnaround. Hope the numbers continue to improve.
I am 6'5" which is tall but not so tall that I shouldn't be able to find clothes at a few select retailers who carry tall sizes. JCPenney used to be a staple for me to find 36" length jeans, but now they carry only up to typical 34" length, like everybody else. And that pretty much means I'm left shopping at Eddie Bauer exclusively - which sucks because I think $59 for a pair of jeans is about 3x too much.
JCP's tall shirts are for 350+lb T-Rexes. Long torso with yards and yards of extra material around the waist, with itty bitty short arms. Their Big&Tall clothing design geniuses must think anyone over 6' tall must also be a buffet bandit with the arms of an Oompa Loompa.
I worked for JCP in Arizona and back then they had great bargains on clothes plus there line of clothes were pretty good. They always had good sales at the end of every season and with my employee discount you could get some real bargains on most of there product lines. I was in loss prevention so my job was different then being in sales. I really liked working there because most of the people I worked with were ok. My boss was a women and she was the best boss I ever had. She was very smart in dealing with shop lifters and with employees who thought that they could get away with stealing from the store. Al in all JCP was ok in my book. I hope they can rebound from the loser
CEO who almost ran them into the ground. Maybe next time they will check to see who they hire to run things is qualified to be in that position.
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