Boston, MA, 11/21/2013 (wallstreetpr) – J.C. Penney Company, Inc. (NYSE:JCP) reported its 3Q2013 results in line with expectations. The quarter ended as the seventh straight loss to the retailer. The loss of $489 million for 3Q13 was higher than $123 million loss reported for the same period last year. The loss translates to $1.94 per share against $0.56 a year earlier.
Investors were, however, buoyed by the positive sentiments emanating from the company. The turnaround strategy of Mike Ullman appears to be showing results. Gross margins were improving and the popular and money spinning house brands were doing well. The company also reported good sales in November.
Ullman’s predecessor, Ron Johnson had jettisoned popular house brands and discounts, alienated loyal customers. Ullman was quick to reverse these unpopular measures after joining in April, 2013. The retail chain launched many sales in the third quarter with ‘doorbuster’ deals. The timing was perfect as the U.S. economy was going through a difficult period with partial government shutdown affecting sentiments. These offers were lapped up by nervous shoppers looking out for quick bargains. – J.C. Penney Company, Inc. (NYSE:JCP) plans to follow the same aggressive pricing strategy during the coming shopping season. With comparable sales down by almost 32% in 4Q2012, a small growth would also reflect as a big percentage increase in 4Q2013.
This aggressive push resulted in gain in monthly comparable sales after nearly two years. – J.C. Penney Company, Inc. (NYSE:JCP) followed it up with other revamps like giving more space to popular merchandise.
With old and unpopular merchandise still being sold at heavy discounts, gross margins are well below competitors. Even customer footfalls have not yet reached the previous levels. Gross margins of 29.5% are lower than competitors’ margins of nearly 40%.
With debt at the end of third quarter at $5.61 billion, the company paid of $200 million in revolving credit on its own.
Investors, looking at some good news from the retail giant, were enthused at the results of the turnaround strategy. The stock of – J.C. Penney Company, Inc. (NYSE:JCP) jumped by 8.38% to close at $9.44 at the end of trading on November 20, 2013.