Penney CEO says company needs time to climb out of 'abyss'
By Phil Wahba
(Reuters) - J.C. Penney Co Inc Chief Executive Myron Ullman told Wall Street on Thursday that the department store chain is emerging from what he called an abyss but warned he needs time to fix the issues of the retailer.
Penney reported another steep quarterly loss on weak sales and heavy clearance deals, but Ullman said the company has taken steps in recent weeks to reassure vendors, shore up its finances, and win back shoppers that defected after a move last year away from coupons.
"This won't happen overnight," Ullman said on a conference call with analysts, of Penney's efforts to recover lost revenue. "Rest assured, we recognize the magnitude of the challenges that we face."
Under Ullman, who returned as CEO last month to replace his successor Ron Johnson, Penney has secured a new $1.75 billion loan and brought back brands such as St. John's Bay.
That brand alone brought in $1 billion in sales a year before Johnson dropped it for more fashionable lines.
The department store chain suffered a net loss of $348 million for the quarter ended May 4, or $1.58 per share, more than twice the $163 million, or 75 cents per share it lost last year. Gross profit margin fell 6.8 percentage points to 30.8 percent of sales as it slashed prices to move inventory.
Total sales fell 16.4 percent to $2.67 billion, in line with the company's warning last week.
Despite the wider loss, shares slipped only 2 percent to $18.42 as analysts dismissed it as a remnant of the Johnson era. Continued...