Consumers might still be uneasy, but Myron E. “Mike” Ullman 3rd, J.C. Penney Co. Inc.’s chairman and chief executive officer, said his confidence is growing — despite the company’s $1 million second-quarter loss and 7.9 percent sales decline.
“We’ve seen the volatility of our business narrow, and this stabilization has enabled us to be more thoughtful in planning our business,” Ullman told analysts on a conference call Friday. “We’re more confident coming into the third quarter than we were in the second quarter, albeit overall consumer demand is still lagging.”
Ullman said the company’s average unit retail price would be on par with a year ago in the second half.
Penney’s projected third-quarter results would range from a loss of 5 cents a share to earnings of 5 cents a share — worse than the profits of 14 cents a share analysts were expecting. The vast majority of the company’s expected profits for the year are slated to come in the all-important fourth quarter, which includes the holiday season.
“Consumers still have a lot on their minds,” said Ullman, who also sits on the board of the Federal Reserve Bank of Dallas. “Overriding concerns about the future of health care and the timing of an economic recovery continues to create uncertainty and angst from the consumers who realize that they may need to save more than they had originally planned. Their spending habits have changed to reflect this for the foreseeable future in our opinion.”
Penney’s loss in the second quarter, which translated to a breakeven performance on a per share basis, was better than the 1-cent deficit analysts’ predicted. Results compared with year-ago earnings of $117 million, or 52 cents a share. And sales for the quarter ended Aug. 1 slipped to $3.94 billion from $4.28 billion.
The company’s strongest results came in shoes and women’s apparel, where the Polo Ralph Lauren Corp.-produced American Living, A.n.a. and Worthington brands were key drivers. California was particularly strong and the Southwest — stripped of competition from the now-liquidated Mervyns — was Penney’s best-performing region.
For the first half, earnings fell 89.9 percent to $24 million, or 11 cents, on a 6.9 percent decline in sales to $7.83 billion.
The company boosted its guidance for the full year to earnings of 75 cents to 90 cents a share, up from the 50 cents to 65 cents previously projected. The new range is more in line with the 89 cents analysts had projected for the year.
But company is still taking a cautious path forward. Capital expenditures are projected to fall to about $400 million next year from $600 million this year.
Shares of the firm declined 6.2 percent to $31.29 Friday.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over the top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty