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JCPenney's FY Sales -3%, Records $152M Loss

Restructuring Charges Mount

Feb 24, 2012 12:48 PM   By Jeff Miller
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RAPAPORT... JCPenney reported fourth-quarter sales declined 4.9 percent year on year to $5.4 billion for the period that included Christmas season and ended on January 28, 2012. Comparable-store sales for the fourth quarter declined 1.8 percent and even Internet sales fell 3.1 percent year on year to $480 million.  The retailer  reported a net loss of $87 million compared with profit of $271 million one year earlier.  Fiscal-year 2011 yielded a revenue decline of 2.8 percent to $17.3 billion and a net loss of $152 million compared with profit of $389 million. Comparable-store sales rose 0.2 percent in 2011 and Internet sales were flat at $1.5 billion. 

Net losses for the year included restructuring and management transition charges, which totaled $451 million,  as well as the financial impact of the company's new pricing and promotional strategy.

Ron Johnson, JCPenney's chief executive, said, ''We closed the year by spending two days with the company's key stakeholders to share our 'blueprint' for becoming America's favorite store. While 2011 was a year of transition at JCPenney, 2012 will be a year of transformation.  With this in mind, our associate teams worked tirelessly throughout the quarter to get the stores ready for February 1, 2012.  I want to thank them for their amazing efforts."

Looking ahead, JCPenney expects full-year earnings for 2012 to meet or exceed $1.59 per share.  This includes approximately $15 million of restructuring charges to complete the realignment of the company's supply chain operations and approximately $197 million of non-cash qualified pension plan expense.  Capital expenditures for the year are expected to be approximately $800 million to support the company's transformational efforts.

"As we embark on this transformation, the strategic changes we are making to our business model will dramatically simplify JCPenney's operations, significantly lower the company's cost structure and create a platform for growth that will result in improved profitability in 2012 and beyond," said Johnson.  "We look forward to updating our shareholders, our vendors and other key stakeholders on our progress throughout the year, beginning in May 2012 with our first quarter earnings release."

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Tags: jcp, jcpenney, Jeff Miller, restructuring, revenue, shares
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