JC Penney sees losses widen but expects strong Christmas sales

 
City A.M. Reporter
STRUGGLING retailer JC Penney yesterday said it was encouraged by business so far in November and forecast higher comparable store sales in the current holiday quarter.

For the fiscal third quarter, ended 2 November Penney reported a net loss of $489m (£302m), or $1.94 per share, compared with a net loss of $123m, or 56 cents per share, a year earlier. Excluding items such as restructuring expenses, Penney lost $1.81 per share.

As previously reported, for October Penney posted its first monthly comparable sales gain in nearly two years, and it said it expects business, and gross profit margin, to continue improving in the fourth quarter, which includes the holiday period.

“The turnaround at JC Penney is beginning to take hold,” chief executive Myron Ullman said.

Penney last year suffered a 25 per cent drop in sales after former chief executive officer Ron Johnson jettisoned the discounts and some merchandise favoured by its long-time customers. The sales declines, which continued until September, stirred concern about the retailer’s financial health.

To remedy that, Ullman, who took the helm in April, has brought back store brands such as St. John's Bay clothing and has been aggressive in cutting prices. Ullman succeeded Johnson and was his predecessor.