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RAPAPORT... J.C. Penney Company Inc. reported that sales plummeted 16.4 percent year on year to $2.64 billion for the first fiscal quarter that ended on May 4. Same-store sales dropped 16.6 percent. The retailer reported a loss of $348 million, or $1.58 per share, compared with a loss of $163 million or 75 cents per share one year ago.
The company began to reverse a major restructuring program during the quarter for which it incurred $72 million in management transition charges. JCPenney took a home office and stores charge of $28 million, store fixtures charge of $28 million and management transition charge of $16 million.
Myron E. Ullman, III, the newly appointed CEO, explained that his objective is to put JCPenney back on a path of profitable growth so he has spent the past five weeks taking steps to stabilize the retailer. ''With that accomplished, together our team is focused on developing and executing strategies to enable us to reconnect with our customer and improve traffic and sales, while operating with strong financial discipline,'' he said.
Ullman stated that JCPenney is now undertaking initiatives to ensure customer excitement and loyalty through a combination of new attractions and beloved brands. ''There is a good deal of work ahead, but by listening to our customers and providing the shopping experience they want, we are confident we will deliver for them and improve performance for the benefit of our suppliers, associates and shareholders,'' he concluded.
JCPenney held cash and cash equivalents of $821 million, a decrease of $18 million compared with the first quarter of 2012. Debt was $3.826 billion, including $850 million outstanding on the revolving credit facility, long-term debt of $2.868 billion and capital leases and notes payable of $108 million. This is approximately $8 million more than previously reported one week ago. JCPenney has entered into a commitment letter with Goldman Sachs Bank USA for a five-year $1.75 billion senior secured term loan facility expected to close during the second quarter.
Additionally, JCPenney introduced the Joe Fresh brand and its Bijoux Bar jewelry counter concept during the first quarter. During the second quarter, JCPenney expects to open a newly designed and merchandised home department featuring new brand partners such as Michael Graves, Jonathan Adler and Sir Terence Conran, among others.
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