J.C. Penney announced Friday that it will close 130 to 140 stores nationwide over the next few months, a move officials say will enable it better align itself with its online efforts and channel resources to locations with the greatest revenue potential. The affected stores represent about 13 percent of the company's 1,014 stores, but the stores represent less than 5.0 percent of total sales.
"This year was not without its challenges, particularly in our women's apparel business, but I am proud this team delivered on our goal to return our company to profitability in 2016", JCPenney Co.'s chairman and chief executive officer, Marvin R. Ellison, said in a released statement.
The usually lucrative holiday period proved troublesome for many retailers this year, with sales at Penney's established stores down 0.7 percent.
J.C. Penney Company will sell its Buena Park, California supply chain facility and shutter its Lakeland, Florida distribution center. The company also is investing in services such as salons that consumers can't get online. Adjusted diluted EPS were 8 cents per share compared with diluted losses per share of $1.03 a year ago. Kohl's Corp. reported Wednesday a drop in fiscal fourth-quarter profit as total sales declined.
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People exit from JCPenny store at Herald Square on November 25, 2016, in NY.
The company plans to release a full list of planned closures in mid-March pending notification of all affected personnel. In addition, the company will offer voluntary early retirement to roughly 6,000 associates. Nordstrom Inc., the department store recently scolded by President Donald Trump, reported late Wednesday a better-than-expected quarterly profit with help from strong sales online and at Nordstrom Rack.
JC Penney Reports Q4 Adj. EPS $0.64 vs $0.61 Est., Sales $3.96B vs $3.98B Est. Comps are considered a key indicator of a retailer's health, since they measure only the year-over-year performance of stores open at least 12 months.
As such, Nagel reiterates a Perform rating on shares of JC Penney without providing a price target. "During the year, it became evident the stores that could fully execute the company's growth initiatives of beauty, home refresh and special sizes generated significantly higher sales, and a more vibrant in-store shopping environment", he said.
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