J.C.Penney Co., while reporting gains in women’s and children’s apparel, saw its net loss widen in the second quarter to $101 million versus $48 million in the year-ago quarter.
Adjusted net loss was $120 million in the three months ended Aug. 4 compared to $23 million in the year-ago period.
Net sales decreased 7.5 percent to $2.76 billion compared to $2.99 billion in the year-ago quarter due to store closings. Comparable sales increased 0.3 percent with children’s, jewelry, Sephora, women’s apparel and salon performing the best.
”We had a strong start and finish to the quarter with both May and July comps delivering ahead of our annual comp guidance range,” said Jeffrey Davis, chief financial officer. “This quarter we adjusted our approach to inventory management from buying to store capacity to ‘buying and chasing’ into demonstrated sales trends. Inventory receipts continue to outpace total sales performance this quarter due to prior purchase commitments. As such we took necessary actions to mark down and clear excessive inventory positions across many of our categories which encompasses more than just seasonal product or fashion misses. We will continue to take actions to right-size our inventory, better curate our assortment and most importantly provide a solid foundation that we continue to build upon as we move forward. Consequently we are reducing our earnings guidance for fiscal 2018.”
Comparable sales are now expected to be flat for 2018 and a loss of $1 to $0.80 on adjusted earnings per share are expected.
Penney’s turnaround efforts have been slowed by the departure of its chief executive officer Marvin Ellison in May. Candidates are being interviewed. “The process is going well,” said chairman Ron Tyson.