J.C. Penney Co., lifted by a big tax benefit, positive sales trends and expense controls, saw its fourth-quarter net income rise to $254 million, or 81 cents per share, compared to net income of $192 million, or 61 cents per share in the same period last year.
However, adjusted net income fell to $179 million, or 57 cents per share, from $202 million, or 64 cents per share, including a gain of $62 million, or 20 cents per share from the sale of the home office.
Investors seemed to be looking for more and J.C. Penney’s stock fell 12.4 percent to $3.43 in premarket trading.
Comparable sales rose 2.6 percent and were recorded on the same 13-week basis as a year ago. Total sales for the fourth quarter ended Feb. 3, 2018 increased 1.8 percent to $4.03 billion compared with $3.96 billion in the year-ago period. The most-recent fourth quarter had 14 weeks versus 13 weeks a year ago.
Jewelry, home, Sephora, footwear, handbags and salon were the top performing categories last quarter.
Penney’s chairman and chief executive officer Marvin Ellison thanked his associates for their “hard work and dedication” and added that in 2018 the company will intensify its efforts in appliances, mattresses and furniture while continuing to modernize the apparel assortment and omnichannel operations.
However, Ellison also disclosed another streamlining at the company, this time, eliminating 360 positions including 130 at the home office. Others were at the regional, district and store support levels. The annual cost savings generated from the cuts were estimated at $20 million to $25 million.
“As the company continues to make progress on its strategic framework and implement new processes and organizational efficiencies, it is imperative that we maintain a thoughtful approach to managing expenses, while effectively supporting the needs of the business,” added Ellison.
In some high-level executive changes, Penney’s named Joe McFarland executive vice president and chief customer officer, responsible for merchandising and store operations. Also Jodie Johnson was promoted to head of merchandising for women’s, beauty, and family footwear, and James Starke has been promoted to head of merchandising for men’s, children’s, home and jewelry, reporting to McFarland. Additionally, Therace Risch has become chief information officer and chief digital officer. As a result of this appointment, Mike Amend will be leaving the company.