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J.C. Penney reports hefty 3Q loss



Published: Fri, November 9, 2012 @ 1:50 p.m.

NEW YORK (AP) — The bad news just keeps piling on at J.C. Penney Co.

The chain today reported a third-quarter loss that's much wider than Wall Street expected on revenue that plunged 26 percent in the latest sign that customers aren't happy that the department-store chain ditched hundreds of coupons and big sales it offered each year in favor of everyday low pricing.

It's the third consecutive quarter of losses and steep sales declines that Penney has reported since the change.

The results underscore the challenges Penney's CEO Ron Johnson, the former Apple Inc. executive who came on board a year ago, faces as he attempts to change the way people shop.

Under Johnson, Penney has been changing everything from its merchandise to its stores. But the centerpiece of his strategy has been to tweak pricing, with the goal of weaning deal-addicted customers off the kind of heavy discounting that eats away at a retailer's profits.

But customers have not embraced Penney's pricing plan, which it rolled out on Feb. 1. To be sure, during the third quarter, revenue at stores opened at least a year — a key measure in the retail industry because it excludes the impact from stores opened and closed during the year — plummeted 26.1 percent. That's higher than the 17.6-percent drop analysts had been expecting.

"I expected horrific but this was worse than expected," said Brian Sozzi, a chief equities analyst for research firm NBG Productions.


Comments

1busyman(239 comments)posted 1 year, 5 months ago

Pennys has to be nuts. This CEO used to be incharge of a company that was selling a product that everyone wanted and had to have. Most people do not care if they have the latest pair of shoes on, but they must have the latest phone. Time to get rid of the guy. He is like a hockey coach who is coaching football. He is waiting for the other team to place a few players in the box so he can run a power play. People love sales and will continue to be drawned to the stores who cash coupons and they love to look through the sale racks. Wake up JCP or this idiot will have all the Penys closed in the future. It will be a shame to have a national treasure going out of business because of a teckie.

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2WilliamSwinger(341 comments)posted 1 year, 5 months ago

I would sooner attribute this staggering loss to the recent embrace J.C.Penny has made in their spokespeople, catalogs and advertisements of normalized parenting and assumed "marriage" by persons that prefer homosexuality. Groups and individuals have taken notice as well as formalized action to take profits away from J.C.Penny and other businesses that directly contradict their own family values. J.C.Penny waded into the same choppy business waters Chick-fil-A found itself propelled into and is now seeing the result. Americans overwhelmingly reject normalized homosexuality and will support or deny businesses that reflect their values. Get with the times author. This was a hugely significant influence on J.C.Penny this year. The stink of the controversy rose to the stratosphere and you are ignoring it. Sad journalism.

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