In a preliminary fourth quarter report, the beleaguered retailer said comparable store sales rose 3.1% during the crucial 9-week holiday period in November and December. For the entire fourth quarter, JCPenney reported comp sales were up 2%. At jcp.com sales were up about 26.3% from the same period in 2012.
“While 2013 brought a lot of change and challenges to JCPenney, the steady improvements in our business show that the company’s turnaround is on track,” said Myron “Mike” Ullman, chief executive. “In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter.”
Quarter to End with $2 Billion Liquidity
But most analysts weren’t impressed. The average estimate from them for was for more than a 4% comp gain. That miss, along with JCPenney’s omission of December or January comp sales and gross margin helped push the retailer’s stock downward.
Shares fell more than 10%, trading as low as $4.90 a share before closing at $5.08 (they were up about 10 cents at presstime).
In one harsh assessment, Sterne Agree analyst Charles Grom wrote to clients that the report was “just not good enough.”
“JCPenney needs the improvement to be much better than currently tracking,” Grom wrote. “It is becoming increasingly critical that the company starts to see meaningful improvement if it is to survive as currently constituted.”
Grom said JCPenney also didn’t provide any indication on traffic or conversion rates.
JCPenney also said it would end its fourth quarter with more than $2 billion in cash, meeting its forecast. Its full earnings report is scheduled for Feb. 26.
Strongest categories during holiday included: beauty products (Sephora), activewear, sweaters, dresses and boots.
JCPenney announced last month that it would be closing 33 stores and eliminating 2,000 positions in order to focus on stores with “highest potential growth opportunities.”