J. C. Penney Company, Inc. announced financial results for its fiscal fourth quarter and full year ended February 2, 2013. For the quarter, jcpenney reported a net loss of $552 million or $2.51 per share. Excluding restructuring and management transition charges and non-cash primary pension plan expense, the Company's adjusted net loss for the quarter was $427 million or $1.95 per share.
For the year, jcpenney reported a net loss of $985 million or $4.49 per share. Excluding markdowns related to the alignment of inventory with the Company's new strategy, restructuring and management transition charges, non-cash primary pension plan expense and the net gain on the sale or redemption of non-operating assets, the Company's adjusted net loss for the year was $766 million or $3.49 per share.
Fiscal 2012 Results:
Total sales for the fiscal year, which included $163 million of sales in the 53rd week, decreased 24.8 percent to $12.985 billion. Comparable store sales, which exclude the 53rd week, declined 25.2 percent. Internet sales through jcp.com were $1.020 billion, decreasing 33.0 percent from last year.
Gross margin was 31.3 percent of sales, compared to 36.0 percent last year. Gross margin was impacted by lower than expected sales, a higher level of clearance merchandise sales and markdowns taken during the year to clear discontinued inventory in preparation for new product and brands being introduced as part of the transformation.
The Company's SG&A expenses decreased $603 million compared to last year.
As noted above, the Company incurred a charge of $148 million, or $0.41 per share, related to lump-sum settlements from its primary pension plan, elected by participants who have separated from the Company.
Additionally, the Company realized net gains on the sale or redemption of non-operating assets of $397 million and recognized charges totaling approximately $86 million, or $0.24 per share, related to the impairment and write-off of certain store and store-related assets.
For the year, the Company incurred $298 million, or $0.83 per share, in restructuring and management transition charges.
These charges comprised the following:
-Home office and stores $109 million, or $0.30 per share;
- Store fixtures $78 million, or $0.22 per share;
- Management transition $41 million, or $0.12 per share;
- Software and systems $36 million, or $0.10 per share;
- Supply chain $19 million, or $0.05 per share;
- Other $15 million, or $0.04 per share.
Despite the impacts of reduced sales and gross margin and restructuring charges associated with the Company's transformation throughout 2012, full year operating cash flow was a use of $10 million. This takes into account the non-cash nature of a number of restructuring charges, the positive impacts of reduced expenses, reduction in inventory levels, specific steps taken to improve overall working capital, including the realignment of vendor payment schedules of $129 million and a one-time deferral of select vendor payments in the fourth quarter of $85 million.