- Prachi Singh |
Providing an update on its third quarter performance, J. C. Penney Company said that it expects comparable store sales will increase in the range of 0.6 percent to 0.8 percent and adjusted earnings per share to be in the range of 0.45 dollar to 0.40 dollar.
"Based on the encouraging results from a third quarter reset in women's apparel, which expanded our casual and contemporary offering, we made the strategic decision to accelerate a wider transformation of the entire women's department by clearing slow-moving inventory primarily in women's and other apparel categories. Following this comprehensive reset, we saw an improvement in performance, particularly in our women's division," said Marvin R. Ellison, JCPenney Chairman and CEO in a press release.
JCPenney initiates growth measures in Q3
The company said, cost of goods sold, which excludes depreciation and amortization, will increase 300 to 320 basis points in the third quarter compared to the same period last year, impacted primarily by a greater sales penetration in major appliances and e-commerce and the decision to accelerate the liquidation of inventory.
The company took steps to create an integrated business function that combines the capabilities of its pricing and planning & allocation teams to work under the oversight of the company's newly appointed chief financial officer. Centralizing those functions, JCPenney said, allows the company to streamline its pricing, promotion and markdown strategies, and consolidate all forecasting and planning capabilities to begin improving its predictive analytics and provide leadership with a more focused view of current sales trends.
"We expect to deliver a positive low single-digit sales comp for the quarter, excluding the benefit of clearance sales. Although these actions will create a short-term negative impact to cost of goods sold and earnings, long term, we firmly believe it was the right decision for the company as we transition into the fourth quarter and fiscal 2018," added Ellison.
For the fiscal 2017 comparable store sales are now expected to be -1 percent to 0 percent; cost of goods sold: now expected to be up 100 to 120 basis points versus 2016 and adjusted earnings per share to be a positive 0.02 dollar to 0.08 dollar.