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JCP 3Q below expectations

Plano, Texas -JCPenney turned in its worst quarterly comp and conversion performance since it began its turnaround strategy at the beginning of the fiscal year, but its net loss narrowed to $123 million from $143 million in the year-ago quarter.
Same-store sales sank 26.1% for the quarter ended Oct. 27, after falling 21.7% in the second quarter and 18.9% in the first.
Conversion rates dropped 10% in 3Q after declining 8% in the second quarter and 5% in the first.
In part, the company blamed the elimination at the end of 2Q of month-long value sales, wherein items were discounted for a full month. Only about half of the $500+ million generated in both the first and second quarter by monthly value sales turned up in everyday price sales.
Total company sales tumbled 26.6% to $2.6 billion.
Executives speaking at an meeting with analysts this morning in New York said that while the total performance in the first three quarters of the turnaround -which is to be completed in 2015 -were worse than originally forecast, the early performance of the new shop-in-shops is exceeding expectations.
Sales per square foot in the parts of the store that have been "transformed," about 11% of the total, are running at $269 vs. $134 for unrennovated areas of the store.
It should be noted, executives said, those figures were derived by also backing out all office space and back room space and represent pure retail square footage.

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