JC Penney Releases Dismal Q2 Earnings Report.
For Q2 2019, JC Penney recorded a net loss for Q2 of $48 million with a decrease in comparable sales of 9 percent. Comparable sales dropped by 6 percent when excluding the company's (https://www.ibtimes.com/no-more-appliances-jc-penney-2760556) appliance and furniture business, which it departed earlier this year. Compared to the company's 2018 Q2 earnings report, its net loss was down compared to the $101 million net loss it reported at that time.
"I am pleased with the results we delivered this quarter and the progress we are making against our plan. While we still have work to do on our topline, I strongly believe that growing sales in an unprofitable way is simply not an option," Jill Soltau, JCPenney CEO said.
"The only way I know how to reconstruct a business, is through a holistic approach across all the key tenets of strategic, purposeful and effective retailing. Notably this quarter, the meaningful improvement we delivered in cost of goods sold was driven by lower permanent markdowns, improved shrink results, increased store and online selling margins and the exit of major appliance and in-store furniture categories.
"Additionally, we reduced inventory by 12.5 % as we continue to reinstate the discipline required to improve inventory management and productivity," Soltau added.
The company said decreased sales was a result of "lower permanent markdowns, improved shrink rates as a rate of net sales, improvements in both store and online selling margins, and the exit from the major appliance and in-store furniture categories earlier this year."
The company had selling, general, and administrative expenses of $870 million for the quarter versus $880 million for Q2 2018, which it said was based on lower store controllable expenses and advertising but offset by a slightly higher incentive compensation.
Lease expenses at is home office was $5 million, and cash on hand was $175 million. Liquidity for the company was $1.7 billion with no outstanding borrowings. JC Penney said it expects liquidity to be at least $1.5 billion for the rest of 2019. Teh company has a credit income of $110 million for the quarter versus $67 million for Q2 2018.
The company's outlook is expected to have comparable sales in the range of 7 to 8 percent while its adjusted EBITDA is anticipated to be in the range of $440 to $475 million.
"Together, we are laser-focused on two parallel paths," Soltau said. "One is building a framework to reestablish the practices needed to strengthen the day to day operations of our business. Concurrently, we are developing differentiating, transformational initiatives. The journey we are on will restore health back into our company. It is an ongoing process and the proposition we are implementing is for the long-term.
"We are not simply running a business 6 we are rebuilding a business. We are making a difference and today, I feel more confident than ever that we will reinvigorate and rejuvenate this great company to sustainable, profitable growth. I will continue providing updates as we move through our business plan and finalize a more comprehensive, long-term strategy for JCPenney," she added.
Shares of JC Penney stock were up 4.47 percent as of 12:17 p.m. ET on Thursday.
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|Publication:||International Business Times - US ed.|
|Date:||Aug 15, 2019|
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