JC Penney reported a net loss of $163 million (-$0.75 Diluted EPS) for the first quarter ended Apr 28, compared to net income of $64 million ($0.28 Diluted EPS) in the year-ago period. Adjusted net loss, excluding markdowns taken as a result of continuing efforts to reduce inventory levels to align with its new strategy, as well as unusual items, was $55 million (-$0.25 Diluted EPS). Net sales declined 20.1% to $3.152 billion, while same-store sales fell 18.9% and internet sales were down 27.9% to $271 million. Ron Johnson, chief executive officer of jcpenney, said “Sales and profitability have been tougher than anticipated during the first 13 weeks, but the transformation is ahead of schedule. Customers love the new jcp they discover in our stores. Our shop strategy has been applauded by vendor and design partners, our merchants have stepped up to the challenge of improving our merchandise and presentation, we have dramatically simplified our business model and reorganized our teams at headquarters and in our stores. While we have work to do to educate the customer on our pricing strategy and to drive more traffic to our stores, we are confident in our vision to become America’s favorite store. We fully expect that the bold and strategic changes we are making to our operations will result in improved profitability and sustainable growth over the long term,” The company anticipates it will incur additional restructuring charges throughout the fiscal year as it takes aggressive action to further simplify its operations and its infrastructure, as well as incurring additional inventory write-downs as it exits certain lines of merchandise. As a result of these impacts, the JCP no longer expects to meet its annual GAAP earnings guidance of $1.59 per share, but affirms its non-GAAP earnings guidance of $2.16 per share which excludes non-cash qualified pension expense, restructuring charges and markdown reserves as we transition our merchandise assortment.
