In the third quarter, shoppers once again seemed to reject the J.C. Penney reinvention, with the retailer’s sales plummeting 26.6 percent.
Comparable store sales for the third quarter declined 26 percent. The company recorded a net loss of $123 million.
This is the third quarter in a row the company has posted dramatic sales and profit declines.
In a webcast following the release of its financial results, CEO Ron Johnson announced that he heads two companies now—he called one “the old J.C. Penney,” and the other JCP, a specialty department store, which he called “the fastest growing start-up in retail history.”
“We need to make the old J.C. Penney perform better, because that will fund the new JCP,” he said.
He noted that while sales have plummeted at the chain overall, the retailer saw encouraging signs at its new in-store shops, built around such brands as Izod, Levi’s, and Sephora.
He also said the company continued to tweak its “fair and square” pricing strategy, and will feature more price comparisons, by putting manufacturer’s suggested prices on its tags. It will also run its “only sale of the year” on Black Friday.
Despite the bad news, Johnson said the company was “excited” for the holiday, and will be offering free family photos this holiday. It also plans to “return to growth” in 2013.
“We are in a long-term process of people discovering the new JCP,” he said. “It takes a long time for people to discover that we’re changing.”
Other balance sheet highlights:
- Internet sales through jcp.com were $214 million in the third quarter, down 37.3 percent from last year.
- Penney ended the third quarter with approximately $525 million in cash and cash equivalents on its balance sheet. “The balance sheet continues to be strong, to keep funding the transformation,” said chief financial officer Ken Hannah.
- During the quarter, the department store opened seven new stores, including four new stores and three relocations.