J.C. Penney starts out a pivotal year under new management with a bigger sales decline and wider loss than analysts expected.
The transformation of 117-year-old Penney, “will take time” said CEO Jill Soltau on a conference call Tuesday morning.
The Plano, Texas-based company has “made solid progress acting swiftly, but thoughtfully,” she said.
Soltau, who joined the retailer in October, has been putting her management group together and working to improve Penney’s processes.
She’s been slashing inventories, working on integrating the online and store businesses, cutting down on shrinkage and revamping merchandise assortments and strategies.
“We are working to reestablish the fundamentals of retail at J.C. Penney, and at the same time, we are building capabilities to satisfy the wants and expectations of our customers,” Soltau said.
“In everything we do we are putting the customer at the center.”
The department store chain posted a first-quarter loss of $154 million, or 48 cents a share, versus a loss of $78 million, or 25 cents a share a year ago. Sales fell 5.6 percent, to $2.44 billion, from $2.58 billion last year as the company discontinued its kitchen and laundry appliances.
Same-store sales fell 5.5 percent in the three months ended on May 4.
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Analysts surveyed by Refinitiv forecast a loss of 38 cents a share and a same-store sales decline of 4.3 percent, to $2.56 billion.
The company also said Tuesday it has hired Shawn Gensch from Sprouts Farmers Market to be chief customer officer and executive vice president. Gensch, who also spent 10 years at Target, will report directly to Soltau and be responsible for growing and retaining customers and oversee the marketing, advertising, social media, private label brand strategy and public relations.
Penney is in the process of closing 18 department stores and nine free-standing furniture home stores. The company has said the stores will be closing in July and August.
Penney mentioned tariffs in its annual report among a list of developments that could hurt its profitability. Most of Penney’s merchandise, both its private brands and national brands, comes from overseas and that’s true throughout retailing.