J.C. Penney Posts $143 Million Net Loss; Names COO
Posted on November 14, 2011 by
PLANO, Texas-A slew of one-time charges brought a $143 million net loss to J.C. Penney in its fiscal third quarter.
The charges comprised items including the disposition of the retailer's outlet business, a voluntary early retirement program, process improvements in the company's supply chain and home office, and costs incurred in the transition of its management. Without these charges, J.C. Penney would have had net income of $24 million for the quarter, which ended on Oct. 29.
The quarter was a weak one for the department-store retailer in terms of sales. Net sales fell 4.8 percent to $4 billion, including a 1.6 percent decrease in same-store sales. Myron Ullman, J.C. Penney's executive chairman, said the slow sales performance reflected the "limited discretionary spending capability" of consumers at moderate income levels.
The sales drop hurt the company's gross margin, which declined 167 basis points to 37.4 percent. Selling, general and administrative expenses did fall 6.3 percent in dollars and 49 basis points as a percentage of sales, to 31.2 percent
J.C. Penney today added yet another new executive to its team--Michael Kramer, who has been named chief operating officer. When he assumes his new post on Dec. 5, Kramer will be responsible for finance, investor relations, corporate strategy and information technology.
Since 2008, Kramer has been president of Kellwood Co., overseeing a portfolio of the company's fashion brands. He has been an executive with retail and consumer-products companies for nearly 20 years.
The fourth quarter will be the first with J.C. Penney under its new leadership--CEO Ron Johnson, the former Apple retail executive who took on his new role on Nov. 1, and Michael Francis, the former Target executive who became president on Oct. 4. Ullman said Johnson and the rest of the company's leadership "are developing strategies for the next phase of (the company's) transformation. This next chapter will be exciting and rewarding for our customers, associates and shareholders."