National Jeweler Network

Financial Reporting

Fine jewelry among JCP’s top sellers

By Michelle Graff

August 15, 2014

Plano, Texas--Fine jewelry was a strong performer in the second quarter for J.C. Penney Co. Inc., a quarter in which sales increased and the retailer’s losses shrank. 

J.C. Penney reported late Thursday that same-store sales for the second quarter ended Aug. 2 were up 6 percent. Total sales rose 5 percent from $2.66 billion to $2.80 billion, and online sales grew 17 percent. 

Fine jewelry, along with women’s and men’s apparel and accessories and home, were the top-performing merchandise divisions during the quarter. Geographically, the southern and western regions of the country delivered the strongest sales performance. 

This is the second quarter of its turnaround that the Plano-based retailer, which counts Modern Bride-branded bridal among the jewelry lines it carries, has reported strength in fine jewelry sales

During the quarter, J.C. Penney was one of a number of major retailers called out by the Today” show for improper disclosure when selling lead glass-filled rubies. The retailer said in a statement to the NBC morning news program that it just started carrying lead glass-filled rubies this spring and they were incorrectly labeled in its inventory system. 

J.C. Penney said it never meant to mislead consumers and, going forward, will remove any references to these stones being “genuine” from its tags and descriptions. 

Gross margin for the retailer improved from 29.6 percent to 36 percent as the company had to put less merchandise on clearance. 

J.C. Penney’s net loss shrank from $586 million to $172 million. 

Commenting on the company’s results, CEO Myron E. Ullman III said, “Our turnaround initiatives continue to produce improved financial results. In the second quarter, we gained additional market share while significantly increasing gross margin in a highly competitive promotional environment.” 

Going forward, he said the retailer aims to position itself as the shopping destination for the moderate consumer. 

J.C. Penney said it expects a mid-single digit increase in sales for the third quarter and full year, with a significant improvement in gross margin.