US: JC Penney losses widen on falling sales
- Fourth quarter net losses widened to $427m
- Sales fell 28.4% to $3.8bn
- Full-year net losses reached $985m
- Sales were down 24.8% to $12.9bn
US department store operator JC Penney saw fourth quarter net losses widen as the company said sales and traffic fell below expectations amid efforts to turn around the business.
Net losses reached US$427m over the quarter ended 2 February, against a $87m loss in the same period of the prior year. Sales fell 28.4% to $3.8bn over the quarter, while comparable store sales declined 31.7%.
Gross margin also declined, down to 23.8% from 30.2% a year earlier.
"Sales and customer traffic were below our expectations in 2012, but as we execute our ambitious transformation plan, we are pleased with the great strides we made to improve JCPenney's cost structure, technology platforms and the overall customer experience," said CEO Ron Johnson.
"We have accomplished so much in the last 12 months. We believe the bold actions taken in 2012 will materially improve the company's long-term growth and profitability."
"Looking ahead, we are energised by our shop roll-out plans for 2013 and the exciting work our teams are undertaking to transform the store. Combining a new marketing campaign focused on style and value, incredible new brands and updated merchandise, with continued enhancements to the customer experience both in our stores and on jcp.com, we are working towards reconnecting with our core customer while attracting new customers to JCPenney."
For the full year, net losses reached $985m, from a loss of $152m in 2011. Sales declined 24.8% to $12.9bn, while comparable sales were down 25.2%. Gross margin fell to 31.3% from 36%.
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