J.C. Penney suffers net loss of 552 million dollars in Q4

J.C. Penney Company in its financial results for

its fiscal fourth quarter reported a net loss of 552 million dollars (Rs 2,973 crores) or 2.51 dollars (Rs 135) per share. For the full year ended February 2, 2013 Company reported a net loss of 985 million dollars (Rs 5,305 crores) or 4.49 dollars (Rs 241.8) per share. Excluding markdowns related to the alignment of inventory with the Company's new strategy, restructuring and management transition charges, non-cash primary pension plan expense and the net gain on the sale or redemption of non-operating assets, the Company's adjusted net loss for the year was 766 million dollars (Rs 4,125 crores) or 3.49 dollars (Rs 187.9) per share.

Ron Johnson, chief executive officer of jcpenney said, “Sales and customer traffic were below our expectations in 2012, but as we execute our ambitious transformation plan, we are pleased with the great strides we made to improve JCPenney's cost structure, technology platforms and the overall customer experience. We have accomplished so much in the last twelve months. We believe the bold actions taken in 2012 will materially improve the Company's long-term growth and profitability.”

Total sales for the fourth quarter, which included 163 million dollars (Rs 877 crores) of sales in the 53rd week, decreased 28.4 percent to 3.884 billion dollars (Rs 20,919 crores). Comparable store sales, which exclude the 53rd week, declined 31.7 percent. Internet sales through its online portal were 315 million dollars (Rs 1,696 crores) in the fourth quarter, decreasing 34.4 percent from last year. Gross margin was 23.8 percent of sales, compared to 30.2 percent in the same period last year. Gross margin was impacted by lower than expected sales and a higher level of clearance merchandise sales related to inventory reductions in 2012.

Total sales for the fiscal year, which included 163 million dollars of sales in the 53rd week, decreased 24.8 percent to 12.985 billion dollars (Rs 69,937 crores). Comparable store sales, which exclude the 53rd week, declined 25.2 percent. Internet sales were 1.020 billion dollars (Rs 5, 493 crores), decreasing 33.0 percent from last year. Gross margin was 31.3 percent of sales, compared to 36.0 percent last year. Gross margin was impacted by lower than expected sales, a higher level of clearance merchandise sales and markdowns taken during the year to clear discontinued inventory in preparation for new product and brands being introduced as part of the transformation.

During spring 2013, the Company anticipates opening close to 20 shops designated for home products in 505 stores with brand partners such as Michael Graves, Jonathan Adler and Sir Terence Conran, among others. In addition to transforming the home area, the Company will open nearly 700 Joe Fresh apparel shops on March 15, 2013 as it transforms nearly 11 million square feet of retail space.