Published August 20, 2013
J.C. Penney (JCP) revealed a wider-than-expected quarterly loss, but an encouraging outlook helped send the struggling retailer's shares higher in choppy trading.
The company revealed an adjusted fiscal second-quarter loss of $2.16 a share, compared to estimates of a loss of $1.06 per share. Sales of $2.66 billion came in lighter than the $3.02 billion logged in the same three months in 2012, and also trailed estimates of $2.76 billion.
Comparable-store sales, a key metric for retailers, plummeted 11.9%, which the company blamed on failed merchandising and promotional strategies.
"There are no quick fixes to correct the errors of the past," said CEO Mike Ullman in a statement. "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."
The Plano, Texas-based retailer hinted at signs of renewal, however, saying back-to-school season is off to an "encouraging" start. Ullman said the back-to-school strength came as a result of "customers' growing confidence in the brands and styles we offer."
The company has been working to rebound from a series of strategic blunders. Perhaps the most high-profile mistake was tapping Apple (AAPL) alumnus Ron Johnson for the chief executive role. Johnson eliminated promotions and sent customers fleeing.
The stock is down about 32% year to date, but shot up as much 5% in early trading as investors grew more optimistic about the current-quarter and prospects for the future.