J.C Penney had a decent second quarter. While many other department stores struggled, Penney used strong contributions from its home, jewelry, men's and Sephora categories to achieve a 4.1 percent increase in same-store sales and a modest 100 basis point improvement in gross margin.
Sephora continues to be a key business driver for Penney, posting a double-digit increase in same-store sales for the second quarter. The business improved across all of Penney's divisions, with the western and central regions showing the greatest growth. Today, there are 515 Sephora stores-within-a-store operating inside of Penney locations and plans call for further expansion of the partnership between the two retail brands.
For all the good news around Penney's quarter, there remains the reality that the chain still posted a loss of 41 cents a share (Wall Street expected a 50 cent loss) as it continues to pay down high interest expenses for store redesigns incurred under former CEO Ron Johnson.
"Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates," said Marvin Ellison, Penney's CEO, in a statement. "I also remain confident in our ability to achieve the long-term financial targets we have laid out."
Photo: JCPenney
According to Commerce Department figures, department store sales were down 0.8 percent in July. Mr. Ellison plans to buck any downward trend in the sector with an emphasis on omnichannel and supply chain improvements.
Penney recently hired Michael Armend, the former vice president of online, mobile and omnichannel for The Home Depot, as executive vice president of omnichannel for Penney. It also named Mike Robbins, the former senior vice president of global supply chain for Target, as its senior vice president of supply chain.
- J.C. Penney Reports a 4.1 Percent Increase in Same-Store Sales and a 100 Basis Point Improvement in Gross Margin For the Second Quarter of Fiscal 2015 - J.C. Penney Company, Inc.
- J.C. Penney Bucks Department Store Trend, Reports Strong Gains - TheStreet
- Stores Suffer From a Shift of Behavior in Buyers - The New York Times (tiered sub.)
- Penney hires Home Depot and Target execs for omnichannel push - RetailWire