US: Q3 sales continue to slide at JC Penney
- Q3 sales fell 26.6% to $2.9bn from $3.98bn
- Comparable store sales were down 26.1%
- Losses narrowed to $123m from $143m
Despite ongoing efforts to try to turnaround its business, sales are continuing to slide at US department-store retailer JC Penney Company, according to its latest third-quarter results.
The Plano, Texas based retailer which operates 1,100 stores, on Friday (9 November) said its sales fell 26.6% to $2.9bn in the three months to 27 October, down from $3.98bn a year earlier. Comparable store sales were down 26.1%, while online sales tumbled 37.3% to $214m.
Lower than expected sales in the quarter and a higher level of clearance merchandise pushed gross margin down to 32.5% of sales, from 37.4% the year before.
But quarterly losses were narrower than last year at $123m or $0.56 per share, helped by cost cutting and the sale of non-core assets.
Despite what he described as a "challenging" quarter overall, JCPenney CEO Ron Johnson said the retailer will continue in its strategy towards lower overall prices and a layout that focuses on in-store shops. The most recent of these have included the Levi's, Izod, Liz Claiborne and JCP brands.
"The performance of JCP's new brands and shops reinforces our conviction to transform JCPenney into a specialty department store," Johnson explained.
"Today, JCP is really a tale of two companies. By far the largest part of our store is the old JCPenney, which continues to struggle and experience significant challenges as evidenced by our third quarter results.
"However, the new JCP, centered around the shop concept, is gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity which continues to give us confidence in our long term business model."
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