JCPenney FY17 comparable sales up 0.1 percent, announces 360 job cuts

J. C. Penney Company, Inc. reported comparable sales increase of 2.6 percent for the fourth quarter and 0.1 percent for full year 2017. Fourth quarter earnings per share were 0.81 dollars, while full year net loss per share was 0.37 dollars. Fourth quarter adjusted earnings per share reached 0.57 dollar and full year adjusted earnings per share were 0.22 dollar. Meanwhile, the company also announced that 130 Home Office positions were eliminated across various departments and 230 position at its group, regional, district and store support teams.

Commenting on the results, Marvin R. Ellison, the company’s Chairman and CEO said in a statement: "For 2017, we improved adjusted earnings per share by 175 percent, reduced our outstanding debt levels by over 600 million dollars and generated over 200 million dollars of free cash flow. During the fourth quarter, we delivered our strongest positive sales comps and achieved our largest gross margin improvement for the year."

Highlights of JCPenney’s Q4 and FY17 results

Total net sales for the 14 weeks period increased 1.8 percent to 4.03 billion dollars. The company said, jewellery, home, Sephora, footwear and handbags and salon were the company's top performing divisions during the quarter. Geographically, the Southeast and Gulf Coast were the best performing regions of the country.

Net income was 254 million dollars or 0.81 per share, compared to 192 million dollars or 0.61 dollar per share in the same period last year, due to a 75 million tax reform benefit recorded in the fourth quarter this year. Adjusted net income was 179 million dollars or 0.57 dollar per share, compared to 202 million dollars or 0.64 dollar per share, which included a gain of 62 million dollars or 0.20 dollar per share, associated with the sale of the company's home office.

Total full year net sales decreased 0.3 percent to 12.51 billion dollars, primarily due to store closures in 2017, most of which closed in the first half of the year, and was partially offset by incremental sales for the 53rd week. Net loss was 116 million dollars or 0.37 dollar per share compared to net income of 1 million dollars last year.

Adjusted net income increased 44 million dollars to 68 million dollars or 0.22 dollar per share, compared to 24 million dollars or 0.08 dollar per share, last year. Adjusted EBITDA was 972 million dollars compared to 1.01 billion dollars last year.

For the 2018 full year, comparable store sales are expected to increase between 0.0 percent to 2 percent and adjusted earnings per share to range between 0.05 dollar to 0.25 dollar.

JCPenney announces

JCPenney also announced the appointment of Joe McFarland as Executive Vice President and Chief Customer Officer, a newly-expanded role that includes responsibility for merchandising, as well as leading all JCPenney store operations and to ensure the positive momentum of its merchandising transformation, Jodie Johnson has been promoted to head of merchandising for women's, beauty and family footwear; and James Starke has been promoted to head of merchandising for men's, children's, home and jewelry, both reporting to McFarland.

Additionally, the company said, Therace Risch , will assume the combined titles of Chief Information Officer and Chief Digital Officer to reflect her added responsibility for omnichannel retail and as a result of this appointment, Mike Amend will be leaving the company.

"Joe, Therace, Jodie and James are remarkable executive leaders who have demonstrated their ability to spearhead critical tasks and drive results and efficiencies along the way. Furthermore, Therace understands the power of technology, and how it can significantly influence and enhance the way consumers shop and ultimately, be the point of differentiation on where they choose to buy," added Ellison.

JCPenney added that as part of ongoing efforts to manage expenses, simplify operations and streamline workload in support of the Company's long-term growth and profitability, approximately 130 Home Office positions were eliminated across various departments. Additionally, JCPenney recently restructured its group, regional, district and store support teams, reducing approximately 230 positions.



Related news