Ullman: J.C. Penney "Well On Our Way" to Turnaround
February 27, 2014,
PLANO, Texas-As CEO Myron Ullman III declared the company closer to its turnaround goals, J.C. Penney posted fourth-quarter net income of $35 million, compared to a net loss in last year's fourth quarter of $552 million.
For the fiscal year ending on Feb. 1, J.C. Penney reported a net loss of $1.4 billion, compared to a net loss of $985 million for the prior fiscal year. Net sales for the quarter were down 2.6 percent to $3.8 billion, bringing the top-line total for the year to $11.9 billion, a decrease of 8.7 percent. Same-store sales in the quarter were up 2 percent, and for the fiscal year, same-store sales declined 7.4 percent.
Ullman described the third phase, which will take place this year, as the "go-forward" phase. Key components of this phase will include remerchandising parts of the store, including home; enhancing the shopping experience; and increasing purchase conversion. In home, Ullman said the company will establish Home Collections of J.C. Penney, which will include a renewal of its focus on bedding, bath, small electrics and decorative accessories.
Fourth-quarter gross margin rose 461 basis points to 28.4 percent. Selling, general and administrative expenses were slashed by 17 percent in dollars and 458 basis points as a percentage of sales, to 26.6 percent.
"We are truly making solid progress, but there is still work to be done," Ullman told the analysts. "Our strategic plan calls for enhanced performance across all key drivers of our business--merchandising, marketing, store experience, jcp.com, our teams and our operations. The goal is to deliver consistently improved financial results and re-establish J.C. Penney as a leader in American retail."