Penney sales tumble but back-to-school 'encouraging' so far
By Phil Wahba
(Reuters) - J.C. Penney Co Inc (JCP.N: Quote) said on Tuesday quarterly sales tumbled again last quarter, even as reinstated CEO Myron Ullman worked to roll back his predecessor's failed merchandising strategies, but there were signs that customers were returning for the back-to-school season.
The company, which reported another steeper-than-expected loss, said sales trends improved every month in the quarter and that business so far this back-to-school period, the second-most important for Penney after the holidays, was "encouraging."
Penney forecast it would have $1.5 billion in cash at the end of the year, enough to have ample merchandise on shelves.
Its shares rose nearly 3 percent to $13.63 in late morning training.
But the lingering impact of Penney's failed efforts to remake itself into a more upscale destination in 2012 under previous CEO Ron Johnson continued to weigh on results and Chief Executive Myron Ullman said the retailer still had a lot of work to do to steady itself.
"It is no secret that the company's prior merchandising and promotional strategies weren't working. We had to make changes, but these changes take time and they have financial implications," Ullman said on a call with analysts.
Sales at stores open at least a year fell 11.9 percent in the quarter, during which it reverted to a promotions-heavy strategy to try to stop the sharp sales decline. Analysts were expecting a 7.4 percent drop, according to Thomson Reuters.
The quarter was the first full period under Ullman, who had been CEO from 2004 to 2011, since he returned in April to fix the damage wrought by Johnson, who left after his efforts led to a 25 percent sales decline last year and a $1 billion loss. Continued...