JCP keeps up the pace in Q2, helped by home
Efforts to turn around the home business continued to pay off in the second quarter for JCPenney, as the division was singled out as among the company’s best performers for the period.
“Kids and home in my opinion were the two most devastated business in the failed strategy, and we have made a lot of progress,” said Marvin Ellison, who stepped in as ceo on Aug.1, during the mid-tier department store’s earnings call this morning. “We are pleased that home was one of our best performing divisions in the second quarter, and we’re committed to not letting up until this business is full turnaround both in-store and online.”
Now into the third quarter and looking ahead, JCP is honing its focus to further improve and enhance home’s merchandise offering and relevance, he continued.
“On the home side … our biggest issue remains that we just have to get our inventory position correct,” Ellison explained. “We are still way too lean on some of the key categories like sheets and towels and bedding. We are working on that and we’ve made improvements, and you are going to see more improvements throughout the year. We need to get our promotional cadence correct in that business. We need to be more aggressive on leveraging square footage to get greater revenue per square foot, and we’re making those changes.”
JCP narrowed its net loss in the quarter, ended Aug.1, by 19.8% to $138 million from $172 million a year ago, and earnings per share to ($0.45) from ($0.56). Net sales were up 2.7% to $2.8 billion from $2.7 billion a year ago, and same store sales increased 4.1%. For the second quarter, gross margin improved 100 basis points to 37.0% of sales, driven by strides in clearance and promotional selling margins.
"We are pleased to report another quarter of improved performance thanks to the commitment and diligence of the JCPenney team,” Ellison said. “Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates. I also remain confident in our ability to achieve the long-term financial targets we have laid out."
Year to date, net income improved 41.8% to $305 million from $524 million in the prior year, and earnings per share to ($1.00) from ($1.72).
Net sales for the six months increased 2.4% to $5.7 billion from $5.6 billion.
Omni-channel presents another growth opportunity for JCP’s future, and Ellison said the company is ramping up this effort with many new and expanded initiatives.
“Although we are admittedly behind the retail industry in our omni-channel strategy, I remain very satisfied with the progress we’re making,” he said. “second quarter sales growth through JCP.com accelerated sequentially from the first quarter, and we’re very excited to see several aspects of our omni-channel capabilities improving.”
Source: Home Textiles Today