There’s no doubt that the new chief executive officer of J.C. Penney Co. Inc., Jill Soltau, has her work cut out for her.
On Tuesday, in another sign of distress, J.C. Penney reported that comparable store sales for the holiday season, defined by the nine-week period ending Jan. 5, 2019, decreased 3.5 percent on a shifted basis reflecting 52 weeks in 2018 versus 53 in 2017.
On an unshifted basis, comparable sales decreased 5.4 percent.
But the company reaffirmed expectations to generate positive free cash flow in fiscal 2018, reduce inventory in excess of $225 million, or 8 percent, and added it expects to end the year with liquidity in excess of $2 billion.
In what proved to be a good holiday sales season for most retailers, J.C. Penney’s own weak results are conspicuous and underscore how urgent it is for Soltau, who became ceo last October, to set in motion new turnaround strategies.
The Dallas-based J.C. Penney also said it will close more stores this year, including three this spring that have been designated so far, as part of an ongoing evaluation of its store portfolio occurring over the next few months. J.C. Penney said it was “assessing locations that may not meet required financial targets or represent a market opportunity to capitalize on a beneficial real estate asset.” The company did not disclose the locations of the three stores set to be closed.
More details on future closings will be shared on Feb. 28 when the company reports its fourth-quarter and fiscal 2018 results. The retailer operates more than 860 stores and jcp.com.
In the third quarter of 2018, the company had a net loss of $151 million, compared to a net loss of $125 million in the 2017 quarter. The adjusted net loss was $164 million, compared to an adjusted net loss of $108 million in the year-ago quarter.
Comparable sales decreased 5.4 in the third quarter.
J.C. Penney’s future rests on generating greater revenues to sustain operations. In particular, the team has been working to pump up its women’s and men’s fashion and active businesses, among other categories. The company could get a lift if Sears liquidates.