JCPenney had quite an unexpected Q3: its comparable store sales increased 1.7% — more than double the company’s own 0.6% to 0.8% growth forecast. However, the department store still has a long way to go if it wants to recoup its losses, even after closing more than 130 stores in 2017.
These store closures contributed to JCPenney’s 1.8% net sales decline, according to a company statement. The retailer’s quarterly net losses widened from $67 million ($0.22 per share) a year earlier to $128 million ($0.41 per share), partly due to heavy discounting to clear slow-moving inventory. The department store specifically targeted women’s apparel as the target of its inventory “reset.”
In Q3, JCPenney increased online SKUs by more than 50% and factory-shipped SKUs by over 100%. Appliances sold grew 120% year-over-year, including a 30% category growth rate for stores that had showrooms a year ago.
After the quarter’s end, JCPenney reorganized its merchandising department, eliminating the recently vacated Chief Merchandising Officer position. Ellison noted in the call that the company seeks to take a page out of fast fashion’s playbook by introducing new merchandise both in-stores and online on a monthly — and in some cases even weekly — basis.