Penney beats expectations as sales improve
J.C. Penney Co. said yesterday that a key sales figure rose in its first quarter, offering an encouraging sign for the beleaguered departmentstore operator.
The company, based in Plano, Texas, said sales at stores open at least a year rose 6.2 percent in the period, marking the second straight quarterly gain. A year ago, the figure had dropped 16.6 percent.
Its stock surged more than 20 percent in aftermarket trading.
Penney has been trying to recover from a botched transformation plan by former CEO Ron Jonson that resulted in massive losses and plunging sales. Johnson, the mastermind behind Apple’s retail concept, was ousted in April of last year after 17 months on the job. The board rehired Mike Ullman, who had previously been at the helm for seven years.
Ullman is trying to win back shoppers by restoring sales events and basic merchandise that the company ditched under Johnson’s tenure in a bid to attract affluent younger consumers. That means discontinuing some of the new trendy brands such as William Rast and Joe by Joseph Abboud that were brought in by Johnson but weren’t resonating with Penney’s middleincome shoppers.
Ullman also is revamping the home-goods area, after Johnson’s plan to overhaul the section with too many trendy and pricey items didn’t sit well with customers.
For the period that ended on May 3, the company said it lost $352 million, or $1.15 per share, which was better than the loss of $1.25 per share analysts expected. A year ago, Penney lost $1.58 per share.
Revenue increased to $2.8 billion, above the $2.71 billion analysts expected.
Wal-Mart Stores
Wal-Mart’s first-quarter net income fell 5 percent as bad winter weather and financial struggles kept customers from spending at the world’s largest retailer.
Wal-Mart Stores Inc. reported results that missed Wall Street’s expectations for the third time in five quarters and gave a weak secondquarter earnings forecast.
The results underscore the big challenges facing Wal-Mart’s new CEO, Doug McMillon, who took over the top role on Feb. 1. The retailer is considered an economic bellwether, accounting for nearly 10 percent of nonautomotive retail spending in the United States.
Wal-Mart’s latest performance appears to show that many people are having a hard time stretching their money from paycheck to paycheck.
For the period that ended on April 30, the Bentonville, Ark., company earned $3.59 billion, or $1.11 per share. That compares with earnings of $3.78 billion, or $1.14 per share, for the same period one year ago.
Wal-Mart said that bad weather hurt earnings by about 3 cents per share. Its performance also was dinged by a higher-thanexpected tax rate.
Income from continuing operations was $1.10 per share. Wall Street analysts, on average, expected earnings of $1.15 per share, according to a FactSet survey.
Total revenue rose 1 percent, to $114.96 billion. Wall Street analysts were calling for higher revenue of $116.43 billion.