J.C. Penney is trimming its real estate footprint as it looks to allocate its resources to stores and initiatives that offer the greatest long-term value potential.
The retailer on Thursday reported earnings and sales for the fourth quarter that beat the Street. It also said it will close 18 department stores (including the three locations previously announced in January) and nine home and furniture stores in 2019. Earlier this month, Penney announced it would stop selling appliances and furniture in its stores and concentrate on driving improvement in women’s apparel, fine jewelry and other key businesses. The decision to exit the categories was the first major change under Jill Soltau, who was appointed CEO in October 2018.
Penney said the impacted store locations, which are expected to shutter in the second quarter, all had comp sales performance that was well below its remaining store base. The company expects to record an estimated pre-tax charge of approximately $15 million during the first half of 2019 related to the closings. Penney’s net income totaled $75 million, or $0.24 per share, for the quarter ended Feb.28, compared to net income of $242 million, or $0.77 per share in the year-ago period. Adjusted net income was $57 million, or $0.18 per share, which was seven cents above Street estimates.
Total revenue declined 8.4% to $3.79 billion, but was above analysts’ forecasts of $3.72 billion. On a shifted basis, which compares the 13 weeks ended Feb. 2, 2019 and Feb. 3, 2018, comparable sales decreased 4 %. On an unshifted basis, comparable sales decreased 6%. Jewelry, women’s apparel, children’s apparel and men’s apparel were the company’s top performing divisions during the quarter. Total net sales for fiscal 2018 decreased 7.1 % to $11.66 billion, compared to $12.55 billion for fiscal 2017. Comparable sales decreased 3.1 % for the year.
