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JC Penney CEO claims solid progress in turnaround
Oct '13
J. C. Penney Company, Inc. reports that it is making solid progress in its turnaround.

Myron E. (Mike) Ullman, III, Chief Executive Officer of JCPenney, said, "Reconnecting with our customers and getting them into our stores is a top priority.  Our enhanced messaging is reminding shoppers that JCPenney's offering of trusted private brands, key national brands and unique attractions sets us apart from the competition. 

“Over the last six months, we have made significant strides and are now seeing positive signs in many important areas of the business, in spite of what continues to be a difficult environment for consumers and retailers in general.  While pleased with the improving trends and more predictable performance, we are still in the early stages of the turnaround and will maintain a relentless focus on achieving our long-term goals for the benefit of our customers, associates and shareholders."

The Company is pursuing a number of strategic initiatives in order to continue driving improved performance.  It provides an update in key areas of strategic focus below.

Improving Sales Trends

The Company saw improved sales trends in fiscal September, and expects this to continue throughout the remainder of the year.     

   Sales for the fiscal month of September, ended October 5, were down 4.0% when compared to September 2012.  This constitutes a 580 basis point improvement over August 2013.

   Sales on jcp.com continue to trend double digits ahead of last year, and are up 18.6% in the third quarter to date. September sales on jcp.com experienced 25.3% sales growth over the same period last year. 

   Women's and Men's apparel, fine jewelry and Women's accessories are performing better than the Company average. Women's apparel, the Company's largest business, reported positive sales for the month of September.

   Gross margins continue to be impacted by lower clearance margins due to the overhang of inventory from the first two quarters of the year, higher levels of clearance units sold during the period, as well as the Company's transition back to a promotional pricing strategy during the second quarter of 2013.

   For the month of September, units per transaction and average transaction value are above last year, while average unit retail was below last year.   

Financial Condition

Last week, JCPenney closed a public offering of 84 million shares of common stock that generated approximately $785 million in net cash proceeds.  The Company's year-end liquidity is now expected to be in excess of $2 billion, taking into account the net proceeds of approximately $785 million from the offering, as well as the previously disclosed expectation of $1.3 billion of year-end liquidity including the undrawn portion of the Company's credit facility. 

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