J.C. Penney posts big loss, but CEO is upbeat

Written By limadu on Selasa, 20 Agustus 2013 | 05.33

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NEW YORK (CNNMoney)

J.C. Penney reported a loss of $586 million, or $2.66 per share. That was more than twice as bad as the $1.06 per share loss analysts were expecting, according to Thomson Reuters.

Sales declined for a ninth straight quarter, coming in at just $2.7 billion. That was down 12% from a year ago, and lower than analysts' estimates.

But despite the weak performance, J.C. Penney noted that its same store sales, a key measure for retailers, were slightly better than they were during the first quarter of 2013. Sales improved each month in the second quarter, a trend the company expects to continue through the second half of the year.

That glimmer of hope may have been just what investors need to hear. Despite the disappointing second-quarter performance, shares of J.C. Penney (JCP, Fortune 500) rose nearly 6% in premarket trading.

Related: J.C. Penney: A buy or sell?

"Since I returned to J.C. Penney four months ago, we have moved quickly to stabilize our business - both financially and operationally - and we have made meaningful progress in important areas of the business," said Mike Ullman, who returned to the CEO position earlier this year following a previous seven year stint.

"There are no quick fixes to correct the errors of the past. That said, we have identified the challenges, put solid plans in place to address them and have experienced and capable people in key roles to do so," Ullman added.

The retailer also took a shot at former CEO Ron Johnson, who was ousted earlier this year in the middle of a failed attempt to turn the company around.

In its earnings statement, J.C. Penney said its performance was "negatively impacted by the company's failed prior merchandising and promotional strategies, which resulted in unusually high markdowns and clearance levels."

Johnson, a former head of Apple's retailing unit, was brought in by activist investor Bill Ackman to try and turn J.C. Penney around. But even Ackman supported the move to fire Johnson when it was clear his strategy was not working,

However, Ackman grew increasingly impatient with the retailer lately and called earlier this month for the company to replace Ullman.

Ackman did not get his way and abruptly quit J.C. Penney's board last week. He also reached an agreement with the retailer that will allow him to start selling his 18% stake in the company.

Shares of J.C. Penney have been one of the worst performers on the stock market for the past two years. To top of page

First Published: August 20, 2013: 8:10 AM ET


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