Penney Takes Pounding; Kohl's Solid; Nordstrom Shines
In the midst of one of retailing’s biggest makeover experiments, J.C. Penney released disappointing third-quarter results, including a net loss of $123 million, with total sales falling 27% to $2.93 billion for the quarter. On a same-store basis, sales dropped 26.1% for the quarter. And Internet sales tumbled 37% to $214 million.
While the Plano, Tex.-based retailer has gotten attention for stylish new marketing efforts and plans to create more exciting shops-within-shops, featuring such brands as Levi’s, Izod and Liz Claiborne, the company’s stock has been pummeled as industry experts have criticized the company’s back-and-forth positioning on promotions as confusing.
In its release, CEO Ron Johnson urged investors to look past the quarter’s declines and see the bigger picture, calling JCP “the tale of two companies. By far the largest part of our store is the old jcpenney, which continues to struggle and experience significant challenges as evidenced by our third-quarter results.
However, the new jcp, centered around the shop concept, is gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity which continues to give us confidence in our long-term business model."
Meanwhile, at Kohl’s, JCP’s most direct competitor, net income climbed to $215 million from $211 million a year ago, while net sales advanced 2.6% to $4.5 billion for the quarter. (Same-store sales for the quarter inched up 1.1%.)
The company says the results are in line with its expectations, and that it is well-positioned for the holiday.
“We have made noticeable investments in Holiday inventory -- both in depth and content -- and the in-store experience,” Kevin Mansell, CEO of the Menomonee Falls, Wisc.-based chain, says in its release. “Our stores are festive and fun to shop. We are also very excited about our expanded gift strategy and our ability to offer great products at great values."
And Nordstrom put up strong numbers for its third quarter, with net earnings reaching $146 million, a 15% bump. Sales grew by 14% to $2.71 billion, with same-store sales improving 10.7%.
The Seattle-based chain says men’s shoes, men’s clothing and kids’ apparel were its best performers this quarter.