JC Penney Posts Improved Same Store Sales in Q4, Shares Still Dive

Andrew Klips  |

Only days after making headlines with its “mitten tweets” during the Super Bowl, embattled retailer JC Penney Company (JCP) found an even better way to keep the focus off its poor financial performance in recent years: post improving comparable-store sales. 

On Sunday, as the Seahawks were beating the daylights out of Denver, JCP was trying for some inexpensive marketing by having a staff member send out tweets while wearing a pair of mittens, sparking comments about their Twitter account possibly being hacked or someone who had a little too much to drink posting tweets. The reviews of the tactics were mixed to say the least, but it did get JCP in the headlines for efforts to get exposure during the Super Bowl.

The Plano, Texas-based department store chain on Tuesday provided preliminary figures on its sales performance during the important holiday season and fiscal fourth quarter periods. JCP’s fiscal fourth quarter ran through the end of January. For the nine-week November and December period, JCP reported same-store sales growth of 3.1 percent, versus the same period in 2012. For the full quarter, same-store sales were up about 2 percent (excluding the 53rd week of fiscal 2012). That’s the first quarter since Q2 of 2011 that the key growth metric of comparing sales at stores open for more than one year has increased.

"In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter," said Mike Ullman, Chief Executive Officer of JCPenney, in a statement today.

JCP noted that during the holiday period sales were strong in several categories, including beauty (Sephora), activewear, sweaters, outerwear, dresses, boots, men's clothing, luggage and housewares.  Sales through jcp.com surged 26.3 percent during the quarter, compared to last year’s quarter.

Ullman held the top executive job until he retired at age 64 in November 2011. Ullman was replaced by for Apple (AAPL) Stores alum Ron Johnson, who tried to recreate the company’s image to a younger, hipper brand. Johnson failed miserably and Ullman was called back to the helm last April to try and win back the brand’s faithful.

In the fourth quarter of 2012, with Johnson refusing to run sales events, same-store sales collapsed by 32 percent compared to the same time in 2011. On that point, while somewhat encouraging given the litany of deep discounts being run by retailers across the country during the holidays, investors shouldn’t be too excited about the rise in JCP comparable sales, given the bar was set very low.

Official fourth quarter and full-year results will be released after the closing bell on February 26.

Thanks to some money raising efforts on Ullman’s part and cost cutting initiatives, the company ended the 2013 fiscal year with more than $2 billion in total available liquidity.  In July, JCP said it was cutting about 2,000 jobs and closing 33 stores in a bid to save $65 million annually.

Wall Street isn’t buying into the better sales results being reported today as the company still has a long road ahead to turn the corner.  Shares of JCP are down more than 10 percent at a new all-time low of $5.06 just after the noon hour.

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