Earnings roundup: Jewelry does well at JC Penney
November 21, 2013
New York--Fine jewelry was one of the top sellers at J.C. Penney in the third quarter, a quarter in which the retailer saw signs of improvement, recording its first same-store sales increase in almost two years.
Quarterly same-store sales fell but comps trended up in October, and J.C. Penney CEO Myron Ullman III said they are “encouraged” by sales results in the early weeks of November.
Highlights from J.C. Penney’s financial results for the third quarter, as well as quarterly results for T.J. Maxx and Marshalls and Target, are below.
Same-store sales fell 5 percent in the third quarter ended Nov. 2 for J.C. Penney Co. Inc., compared with a comp decline of 26 percent in the third quarter 2012.
J.C. Penney said the quarter ended with a same-store sales increase of 0.9 percent in October, as previously announced, and sales improved each month during the quarter.
Total sales fell 5 percent from $2.93 billion to $2.78 billion. Online sales totaled $266 million, up 25 percent year-over-year. In addition to fine jewelry, women’s and men’s apparel were the company’s top performing divisions.
Net loss more than tripled, growing from $123 million to $489 million. Gross margin fell from 32.5 percent to 29.5 percent due to clearance sales and the return of sales in general, which disappeared temporarily under former CEO Ron Johnson.
“Our strategies to reconnect with customers are beginning to take hold, and this became increasingly clear as the quarter progressed,” Ullman said. “We are proud of the company’s October sales performance, encouraged by the early weeks of November, and believe we are making strides toward a path to long-term profitable growth.”
The company expects positive same-store sales for the fourth quarter.
The TJX Companies
Marmaxx, the division of the TJX Companies Inc. that operates T.J. Maxx and Marshalls stores in the U.S., reported a 4 percent increase in same-store sales in the third quarter ended Nov. 2. Total sales were up 8 percent from $4.16 to $4.48 billion.
Total same-store sales for the TJX Companies, counting its stores in Europe and Canada, increased 5 percent while total sales hit $6.98 billion, up from $6.41 billion in the prior-year period, a 9 percent increase.
Net income for the third quarter rose from $461.5 million last year to $622.7 million this year.
CEO Carol Meyrowitz called the company’s third quarter results “robust” and said the company now expects its fiscal year same-store sales to increase 3 percent based on its third quarter performance.
The company, however, expects same-store sales to grow only 1 to 2 percent in the fourth quarter due to the holiday shopping period being six days shorter this year.
T.J. Maxx ended the quarter with 1,075 stores in the U.S., up from 1,052, while Marshalls now has 941 locations, up from 914.
The company said it plans to eventually have a total of 3,000 stores in its Marmaxx division in the U.S. and a total of 450 Winners, HomeSense and Marshalls stores in Canada, up from 325 now.
United States same-store sales essentially were flat in the third quarter for Target Corp. while total sales increased 2 percent from $16.6 billion to $16.9 billion. Seasonal markdowns led to a decrease in the gross margin rate, from 30.3 to 30 percent.
Target began opening stores in Canada this fiscal year, with sales reaching $333 million at a gross margin rate of 14.8 percent due to the clearance of excess inventory.
Total sales, including both stores in the U.S. and Canada, reached $17.26 billion, up 4 percent from $16.60 billion.
Target opened a total of 32 stores in the third quarter, nine in the U.S. and 23 in Canada. The Minneapolis-based retailer announced earlier this month that all of the Canadian stores scheduled to open this year will be operational by the end of this week. Target will have 124 stores in the country by years’ end.