Boston, MA 03/01/2013 (wallstreetpr) – J.C.Penney Co. (NYSE:JCP) CEO Ron Johnson is under immense pressure after the initial year of his turnaround plan did not go well and yielded lowest annual sales for the company in the last two decades.
The stock fell 15 percent yesterday in late trading after the company announced its fourth quarter results ended on February 27th ’2013. Its net loss extended to $552 million from $87 million last year, and the annual revenue also fell by 25 percent to $13 billion, the sharpest decline in more than two decades.
Ron Johnson, ex-Apple Inc. (AAPL) retail head, joined as the CEO of J.C. Penney Co. in November 2011, and induced some revamped strategies with regards to adding sales, promotional activities and new pricing displays during recent months. Johnson, however, reiterated his plan to set up 100 boutiques inside most of the company’s stores, but at the same time accepted to have committed some grave mistakes in the year gone by.
While speaking on the decline in the J.C. Penny’s stock price, Erika Maschmeyer, an analyst at Robert W. Baird & Co. in Chicago, who maintains a neutral rating on the stock, said, “ There is really nothing that we have seen like it and it is hard to figure out the scenario for 2013.”
J.C. Penny dropped to as low as $17.90 at New York stock exchange finally closing the trading on Wednesday at $21.16. The stock price has fallen by 30 percent since Johnson has taken over as the CEO of the company. During this period, the S&P’s 500 retail index has rallied 42 percent.
The fourth quarter revenue earnings, including the revenue earned during the holiday shopping period has fallen by 28 percent to $3.88 billion. On the contrary, analysts had estimated $4.08 billion of average revenue generation.
While speaking on the earnings call, Johnson declined to get into details on sales in the current quarter, and said he wants to ‘stay out of the guidance’ focus on the long-term strategies. He further reiterated that the company will have a realistic chance to return back on the growth track once the setting up of stores is done. J.C. Penney Co. CEO, however, gave some hints on the company’s first quarter performance, and said that Joe fresh had been the top performer online this week, taking over Liz Claiborne.
A lot of big brands associated with J.C. Penny are not happy with the way they are shop treated resulting into a fall in the sales volume of their products, according to Ron Friedman, head of retail and consumer products, Marcum LLP.
Shares of J.C.Penny company Inc. (NYSE:JCP) were down by 16.97% to close at $17.57.