JC Penneys net loss widened to US$489m during the quarter

JC Penney's net loss widened to US$489m during the quarter

Struggling department store retailer JC Penney has seen its third-quarter losses widen, hurt by lower revenues and margins - but says it expects sales to improve during the fourth quarter. 

The group's net loss widened to US$489m during the three months to 2 November, up from $123m in the same period of last year.

Sales declined 4.8% to $2.78bn from $2.93bn in the prior year, while comparable store sales fell 4.8% during the period. However, the company said this was an improvement of 710 basis points when compared to the prior quarter.

It also noted that comparable store sales and gross margin improved sequentially throughout the quarter. October sales were up 0.9%, reversing the double-digit declines seen in the first two quarters of its financial year, and the 4% decline reported in September.

Gross margin slipped to 29.5% during the quarter from 32.5% last year, impacted by lower clearance margins due to the overhang of inventory from the two prior quarters, higher levels of clearance units sold, as well as the company's transition back to a promotional pricing strategy.

JC Penney CEO, Mike Ullman said: "Our strategies to reconnect with customers are beginning to take hold, and this became increasingly clear as the quarter progressed.

"This is the result of the tremendous efforts of the associates across our company to restore the merchandise customers want and deliver an unmatched shopping experience.

"We are proud of the company's October sales performance, encouraged by the early weeks of November, and believe we are making strides toward a path to long-term profitable growth," Ullman added.

The company said it expects fourth-quarter comparable store sales and gross margin to improve both year-on-year and sequentially. Selling, general and administrative expenses are expected to be below last year's levels.