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RAPAPORT... J.C. Penney Company Inc. reported that revenue fell 2.6 percent year on year to $3.78 billion for the fourth quarter that included the Christmas season and ended on February 1. However, JCPenney's cost of goods sold fell 8.5 percent to $2.7 billion and total operating expenses were reduced 27.4 percent to $1.2 billion. The retailer reported a profit of $35 million compared with a loss of $552 million one year earlier. For the company's fiscal year, revenue fell 8.7 percent to $11.9 billion, cost of goods sold dropped 6.2 percent to $8.4 billion and operating expenses declined 8.6 percent to $4.9 billion. JCPenney's loss for the year climbed to $1.4 billion from a loss of $985 million in 2013. Investors were pleased with results as shares in JCPenney jumped about 10 percent in after hours trading to $6.60; however, shares are down 73 percent from one year ago. Same-store sales improved 2 percent year on year for the retailer's fourth quarter, but comparable-store sales plummeted 7.4 percent for the full year. Top-performing product categories at JCPenney included home goods, men's apparel, women's accessories and Sephora. Looking ahead, JCPenney anticipates that comparable-store sales will improve by between 3 percent and 5 percent during the first quarter, coupled with slightly improved gross margin and lower selling and general expenses. For the current fiscal year, JCPenney expects that same-store sales will rise by the mid-single digits. Myron Ullman, III, the CEO of JCPenney, said, "JCPenney achieved what it set out to do on a number of important fronts in 2013. We stabilized our business, both financially and operationally, and restored our process disciplines, promotions, inventory levels and focus on the customer. As a result, we generated positive comparable-store sales in the fourth quarter and ended the year with more than $2 billion in total available liquidity. These important accomplishments reflect the progress we have made in our turnaround, which remains on course heading into 2014. "With the most challenging and expensive parts of the turnaround behind us, we will focus on improving gross margin, managing expense and steadily growing our sales in 2014. Our strategic plan seeks to enhance performance across all of the key drivers of our business: merchandising, marketing, store experience, jcp.com, our teams and our operations. The goal is to deliver consistently improving financial results and to restore JCPenney as a leader in American retail," he said.
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