J.C. Penney shares plunge 20% on 4Q report

Investors answer continuing big losses with huge sell-off

NEW YORK — Shares of J.C. Penney Co. plunged nearly 20 percent a day after the department-store chain reported its fourth straight massive quarterly loss.

Penney shares fell $3.98 to $17.18, contributing to a 60 percent loss since early last year.

The sell- off by investors is the latest sign that CEO Ron Johnson’s plan to turn around the retailer is failing on Main Street and Wall Street.

The strategy, which Johnson started early last year, includes the company ditching coupons and most sales in favor of everyday low prices, bringing in hipper designers like Betsy Johnson and remaking outdated stores.

But the company’s quarterly and full-year results, which it reported Wednesday after the markets closed, reveal just how much the company is struggling with the plan.

During the fourth quarter that ended Feb. 2, Penney’s revenue at stores opened at least a year — a figure the retail industry uses to measure of a store’s health — dropped 31.7 percent. That’s on top of hefty drops in the previous three quarters of 26.1 percent in the third, 21.7 percent in the second and 19 percent in the first. And it’s steep- er than the decline of 26.1 percent Wall Street had expected.

The company, based in Plano, Texas, widened its quarterly loss to $552 million, or $2.51 per share, for the three-month period ended on Feb. 2, up from a loss of $87 million, or 41 cents per share a year ago. Revenue fell 24.8 percent to $12.98 billion.

Penney’s results for the full year were even worse. For the fiscal year, Penney lost $985 million, or $4.49 per share, compared with a loss of $152 million, or 70 cents per share, in the year ended January 28, 2012. And the company’s revenue fell nearly a quarter, or 24.8 percent, to $12.98 billion from the previous year’s $17.26 billion.

“It’s the worst performance I have ever seen by a company i n one year,” said Walter Loeb, an i ndependent retail consultant.

While acknowledging that Penney made some mistakes, Johnson told investors that Penney would start offering sales in stores every week.

That’s in addition to the sales events that the company said last month that it would start offering during holidays and other key sales periods throughout the year.

“Experience is making mistakes and learning from them, and I have learned a lot,” Johnson said. “We worked really hard and tried many things to help the customer understand that she could shop any time on her terms. But we learned she prefers a sale. At times, she loves a coupon.”