J.C. Penney Ends Monthly Sales ReportsMatt Townsend
J.C. Penney Co., which began reporting monthly sales figures last year to shine light on its turnaround effort, will abandon the practice this year as the comeback plan starts to takes hold.
The department-store chain will continue to be transparent about its progress and try to provide updates throughout the year, Kristin Hays, a spokeswoman for J.C. Penney, said in an e-mail. The monthly sales reports are no longer seen as necessary and won’t be provided again “anytime soon,” she said.
The announcement followed a quarterly earnings report last week that showed a company on the mend, sending the shares up 25 percent in a single day. Chief Executive Officer Mike Ullman predicted that J.C. Penney’s turnaround will be completed this year. Discontinuing the monthly sales reports is part of that plan and brings the company in line with much of the industry, said Paul Swinand, an analyst for Morningstar Inc. in Chicago.
“It’s a mild positive, in that they always said they didn’t want to go back to monthly sales,” he said in an e-mail. “Macy’s Inc., Nordstrom Inc. and Wal-Mart Stores Inc. have all dropped.”
Still, the move means investors will have less information. That’s never a good thing, said Rick Snyder, an analyst for Maxim Group LLC in New York.
J.C. Penney’s stock dropped more than 1 percent in intraday trading after Bloomberg reported on the change. It rebounded later in the session, closing up 9.3 percent at $7.96. Still, shares of the Plano, Texas-based company remain down 55 percent over the past year.
J.C. Penney had stopped reporting same-store sales under CEO Ron Johnson, a former Apple Inc. executive who led a failed makeover of the more-than-century-old chain. After he was ousted last year, the company returned to reporting same-store sales in October. It followed with gains the next two months. The company then jarred investors by releasing a two-paragraph statement in its December results that didn’t include sales data. The stock fell 10 percent.
Ullman’s turnaround plan then gained traction during the holiday season. Fourth-quarter same-store sales rose 2 percent, marking the company’s first quarterly gain since 2011. The company also eased concerns that it didn’t have enough money to complete the turnaround. J.C. Penney expects to have $2 billion in liquidity at the end of this fiscal year, matching what it had in January. After Ullman returned last April, the company raised almost $4 billion in cash by borrowing money and holding a stock sale.
Same-store sales are a key measure of a retailer’s growth because new and closed locations aren’t counted. In J.C. Penney’s case, the company also includes online revenue. Only a handful of chains still report the figures on a monthly basis.