February 26, 2014, 4:44 PM

J.C. Penney’s web sales rise 26% in Q4

Online sales represented 9.1% of total sales for the year and 10.1% for Q4, the retail chain says. Online sales rose 6% in 2013 the first increase for the beleaguered retail chain since 2011.

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J.C. Penney Co. Inc. says it is two-thirds of the way through its turnaround plan and that it is ready to enter its “go forward” phase. “We are pleased with how quickly the business has come around,” says CEO Myron E. Ullman said during an earnings call today.

JCP.com generated $381 million in sales during the fourth quarter ended Feb. 1, equivalent to 10.1% of total sales of $3.78 billion and up 26% from the same period a year ago. Full-year web sales totaled $1.08 billion, up 5.9% from $1.02 billion a year ago. Chief financial officer Ken Hannah says web sales in January 2014 alone were up almost 45% year over year, without assigning figures. JCP.com web sales peaked in 2011 at $1.59 billion, according to data from Top500Guide.com.

J.C. Penney rehired Ullman as CEO last spring after the previous CEO, Ron Johnson, stepped down. Ullman had been the retailer’s CEO for seven years before Johnson. He has reversed a number of the decisions made by his predecessor and reinstated many of the strategies in place prior to Johnson’s tenure, including a focus on e-commerce.

Ullman said in the earnings call that the retailer’s previously announced store closings will take place by the beginning of May; 33 stores will close. The retail chain currently operates about 1,100 stores. One new store is planned to open this fall in Brooklyn, N.Y. Ullman says the new store will represent the “J.C. Penney store of the future.”

For the 2013 fiscal year ended Feb. 1, J.C. Penney, No. 34 in the Internet Retailer 2013 Top 500 Guide, reported:

  • E-commerce sales were $1.08 billion, an increase of about 5.9% from $1.02 billion in fiscal 2012.
  • Total sales were $11.86 billion, down by 8.5% from $12.96 billion a year ago. The $12.96 billion figure includes $163 million in sales generated in a 53rd week in the reporting calendar a year ago.
  • Comparable-store sales declined 7.4%.
  • Net loss was $1.39 billion compared with a net loss of $985 million in the same period last year.

The web represented 9.1% of total year sales, compared with 7.9% of total sales for 2012 and 8.7% in 2011. Ullman cited the improved merchandise assortment, restored inventory levels and improvements to JCP.com for improving web sales.

For the fourth quarter ended Feb. 1:

  • Web sales were $381 million, which the retailer says is up 26.3% versus the comparable period last year, which excludes an extra calendar week in the reporting schedule a year ago. Last year, Penney’s reported Q4 sales of $315 million. The retailer did not release a dollar figure for web sales for the extra week in 2012.
  • Total sales were $3.78 billion, down by 2.6% from $3.88 billion.
  • Comparable-store sales increased 2.0%. Comparable-store sales include online sales. For the nine week November-December period, comparable-store sales increased 3.1%, Hannah said.
  • Net income was $35 million compared with a net loss of $552 million in the same period last year.

Ullman, in the earnings call, reiterated J.C. Penney’s commitment to pursuing a strategy of tying together its stores and the web, and said that J.C. Penney will “lead the way for a true omnichannel experience.” Ullman also cited the recent hire of Michael Rodgers as the department store chain’s senior vice president of omnichannel strategy and execution.


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