• Net loss of US$143m against a $44m profit in 2010
  • Sales down 4.8% to $3.9bn

US department store operator JC Penney swung into a net loss in the third-quarter as the company was hit by restructuring charges and lower sales.

The company said today (14 November) that it reported a net loss of US$143m for the quarter ended 29 October against a $44m profit in the same period of the previous year. Excluding the impact of restructuring charges, net income would have been down to $43m.

Sales fell 4.8% to US$3.9bn over the quarter, while comparable-store sales were down 1.6%. It said the total sales declines reflected the exit from its catalogue and catalogue outlet businesses. Gross margin decreased approximately 160 basis points to 37.4% reflecting the softer than expected selling environment and the resulting higher levels of promotional activity.

"While our more affluent customers continued to respond well to JC Penney's attractions, the moderate customer continues to have limited discretionary spending capability, and that was apparent during the quarter. However, the combination of customer response to the style and value we offer in categories such as women's and men's apparel and accessories, coupled with the expense reduction initiatives we put in place over the course of 2011, allowed us to report results in line with our expectations," said executive chairman Myron Ullman.

"As we look to the holidays, JC Penney has an exciting marketing plan in place to showcase our wide range of great gifts available in stores and on jcp.com. As our associates devote themselves to ensuring that our customers can make the holidays enjoyable and memorable for their families, our new CEO Ron Johnson and the leadership team are developing strategies for the next phase of JC Penney's transformation. This next chapter will be exciting and rewarding for our customers, associates and shareholders."