JCPenney is running out of time JC Penney's (JCP) CEO Marvin Ellison on Q1 2018 Results - Earnings Call Transcript JC Penney is tumbling as guidance disappoints and cold weather weighs on sales (JCP) JCPenney Shares Tumble On Bleak Q1 Outlook JCPenney focusing on gross margin

JCPenney is running out of time

JCPenney reported another quarterly loss and weak sales. Its debt load is increasing. And it blamed bad weather for weak results. Things look bleak.

Paul R. A lot Shares of JCPenney plunged 10% early Thursday morning and now trade for less than $2.80 a share. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. Any such forward-looking statements are subject to risks and uncertainties, and the company's future results of operations could differ materially from historical results or current expectations. So having said that we took appropriate markdowns and pricing actions in the first quarter to address slow moving inventory and make room for new product.

As such our liquidity position at the end of the first quarter was approximately $2 billion. We believe that JCPenney can leverage our unique position in the marketplace to achieve $100 million growth opportunities in special size 2018. As it relates to the inventory we do believe that we have an ongoing opportunity to induce -- reduce our inventory levels. I guess any sense on magnitude of the improvement that you've seen in May?

Thank you for taking my call. This has been very important to set the stage for what we're starting to work on now which is creating a very much inspiring experience on the website. So you may recall that last year we had sold the Paramus New Jersey facility which we are actually closing this fiscal year. And so our partnership with Shaquille O'Neal is to take our market share lead in men's big and tall and leading to even more.

Watch J.C. Stay in the loop! The longer winter and late start to spring weighed on customer traffic. JCPenney is in serious trouble. That means JCPenney is now a penny stock, Wall Street jargon for a company with a stock price in the low single digits. All times are ET. Please note that no portion of this presentation may be rebroadcast in any form without the prior written consent of JCPenney. And third, our negative comp performance in Women's [specialty] apparel created gross margin pressure.

Cash and cash equivalents at the end of the first quarter were $181 million which was $182 million less than the end of the first quarter last year. Our second key area is beauty, we have a significant opportunity to leverage our total beauty experience. If you take a look at our weeks of supply on hand that's a definitely an opportunity for us. Matt on the calendar shift it's marginal. But also this year so far as with any other quarter we had already taken some actions, as related to our operations above store level as well as a few areas here at home office.

So that will work more seamless for our customers. And in that transaction, we realized the $50 million gain, $20 million of the $50 million was recognized last year and $30 million of it was recognized this year. Not to mention our kids plus business, Boys Husky, Girls Plus. And then just here in 2Q, that will seems like April got significantly better, if I recall back on 2Q of last year May was your toughest compare of the year.

Sign up for Finance Report by AOL and get everything from breaking finance news to money-saving tricks delivered directly to your inbox daily! JCPenney reported comparable sales of 0.2%, missing the 2.1% estimate from analysts surveyed by Bloomberg. There's no sugarcoating it. Perhaps the most worrisome thing for JCPenney, though, is that it appears to be running out of both cash and time to fix things.

JC Penney's (JCP) CEO Marvin Ellison on Q1 2018 Results - Earnings Call Transcript

J. C. Penney Company, Inc. (NYSE:JCP) Q1 2018 Earnings Conference Call May 17, 2018 08:30 AM ET Executives Trent Kruse - IR Marvin Ellison - Chairman and CEO Je

During the first quarter free cash flow was a use of cash of $421 million an increase of $128 million compared to last year's use of cash of $293 million. One of our critical components of our beauty strategy is our continued best in class partnership with Sephora. We have not provided any guidance as to what that amount would be over the course of the year. I mean we can spend the rest of the call talking about shifted, non-shifted.

Just to give you some context, we have 97 malls that we share with Bon-Tons. I will take that one, this is Trent. It is now complete. So all those businesses fall under the umbrella of revenue per customer because they are customer shopping JCPenney, they wanted those categories and we didn't sell them. Chuck what we're trying to do is we're trying to under promise and over deliver specifically on the revenue side.

Subscribe to our other newsletters Emails may offer personalized content or ads. Revenue came in below expectations at $2.58 billion versus the anticipated $2.61 billion. The department store chain, famous for its Christmas catalogs, is losing money — and customers. The company lowered its earnings forecast for the year to 13 cents per share at best, and said it could lose as much as 7 cents. All Rights Reserved.

However we see the importance of incremental profit dollars in these initiatives. So looking ahead to Q2 and the back half of the year the following gross margin initiatives gives us confidence that we can see improvement for the balance of the year. Inventory at the end of the first quarter was approximately $2.9 billion down 1.4% versus last year and up 2.6% on a comp store inventory basis. We're also excited about a series of new launches and brand expansions we have planned in Sephora for 2018.

But I think relative to our business is not material enough to gain the nuances of it. So I'm curious if you can maybe talk about March ex-Easter shift, maybe March and April together around that Easter period? That number was 107, but over the course of the last couple of years they closed stores. No details, I mean that's a replacement of our existing facility in Buena Park. Last year in the second quarter I think it's fair to say that was a dynamic time for the company, you had a number of store closings and liquidation sales on going.

And ladies and gentleman this does conclude the Q&A portion of today conference call and it also concludes the conference. PAUL J. You may unsubscribe at any time. JCPenney has tried to combat the changing market environment by branching out to sell products other than just clothing. It has a lot of debt. Wall Street was looking for a profit of 19 cents. Factset: FactSet Research Systems Inc. Joining us on today's call are Marvin Ellison, Chairman and CEO of JCPenney; and Jeff Davis, our CFO.

Moving now to expenses. Our teams remain committed to effectively manage inventory levels without fact-finding customer availability. We will keep you updated on the timing and successes of these launches on future calls. Just one additional point, regarding strategic inventory investments, men's apparel was the only positive comping apparel division for us in Q1 in spite some of the weather challenges we faced.

JC Penney is tumbling as guidance disappoints and cold weather weighs on sales (JCP)

JCPenney plunged more than 14% in pre-market trading Thursday after reporting first-quarter earnings and guidance that missed Wall Street estimates.

It will do -- it will service what that facility was servicing frankly. So just asking for maybe a little bit more hand holding on how we should think about the amount of recovery possible or expected in the merchandise margins for 2Q? We had a question about women's apparel and creation and navigation in store. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. JCPenney has tried to combat the changing market environment by branching out to sell products other than just clothing.

The company’s full year guidance was well shy of estimates. A dismal earnings report on Thursday only reinforced that time is running out. JCPenney finished the quarter with just $181 million in cash, down from $363 million a year ago. All rights reserved. Thank you, Trent. We're also encouraged with return of positive sales comps in our overall men's apparel business. SG&A expenses for the quarter were $826 million or 32% of sales compared to $938 million or 34.7% of sales for the same period last year.

Also in 2018, we plan to rebrand and remodel another 100 salons to salon by InStyle. Two reasons why they were able to accomplish that, were investments in the big and tall category and in work wear. Beauty is a significant part because it is weather resistant and also it provides a level of differentiation and brings an increased level of relevance to our stores. Curious if you had already picked up the pace of markdowns at that point or if you look at the sales gross margin equation during the February and March period, as being a strong one?

So no meaningful updates. Jeff mentioned that we expect gross margin to improve year-over-year in Q2, and we expect SG&A to be down. I'm just regarding the inventory levels and what you're thinking about the speed and the ability to touch read and react as well as making sure your customer can navigate well? IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT.

Macy’s, one of the chain’s top competitors, on Wednesday reported strong comparable sales and raised its earnings guidance for the full year. It sees anywhere from a $0.07 a share loss to a $0.13 a share gain. JCPenney ( JCP ) reported an adjusted loss of $69 million in the first quarter, even worse than Wall Street was expecting, and lowered its projections for the year. Much of the big decrease was because of a $190 billion debt repayment.

Good morning, everyone. Because apparels and activewear will become a larger piece of our business in upcoming quarters the improvements we've made in these categories bode well for the balance of 2018. The reduction in expenses was primarily driven by optimizing controllable cost and more efficient marketing. Merchandise accounts payable was $933 million, up $40 million versus the first quarter last year.

Those two categories were more weather resistant than typical spring attire and enabled that division to deliver positive comp. We mention active where we're opening 700 fanatics shops this summer. Well specific to the months, when we look at February and March, shift and un-shifted the business was very strong. Obviously we're keeping a very close eye on that and we're going to follow it with intent detail.

SG&A decline is driven in large parts by continued efficiencies in the business, and we were really pleased with our performance in SG&A over the last couple of years. Oliver we have implemented a speed calendar and this impacts women's apparel more so than any other merchandising category. If you have any additional questions about our online transcripts, please contact us at: [email protected] .

JCPenney Shares Tumble On Bleak Q1 Outlook

JCPenney reported its first quarter 2018 earnings Thursday, and shares tumbled on weak comparable sales and a $69 million loss.

Is je huis een betere ‘belegging’ dan sparen of aandelen? Sales fell 4%, also missing estimates. But JCPenney is adding even more debt. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. We had a strong start to the first quarter with February and March comps ahead of our annual guidance range.

Turning now to our adoption of new accounting standards, as I mentioned earlier, we implemented new FASB accounting pronouncements starting in the first quarter. Turning now to fiscal 2018 guidance and the update to adjusted earnings per share, we announced earlier this morning. And finally we recently partnered with Fitbit to introduce a line of health and wellness products into our assortment. From a quantification it's difficult to do it in a very sustained fashion because it was an ongoing process.

So that gives you some perspective on the dynamics of the month of April. But as we look at our competitor Sears conversely we share over 350 malls with Sears and we had a 100 Sears stores close in malls we shared over the course of the last call it three years. Would you mind just elaborating on that and then talk about the [six] that you got in place now? We think we still have structural opportunities with organizational layers that we need to address.

Follow SA Transcripts and get email alerts Your feedback matters to us! Wall Street analysts surveyed by Bloomberg were expecting full year earnings-per-share of $0.18. Fairchild Publishing, LLC, a subsidiary of Penske Business Media, LLC. Copyright © 2017 Business Insider Nederland. Much like floundering rival Sears ( SHLD ) , JCPenney is struggling to adapt to the changing retail landscape as people increasingly shop on their phones.

All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates. © 2018 Cable News Network. However our April results were negatively impacted by unseasonable weather resulting in a sales comp increase of 0.2% for the quarter. I'll come back and close our prepared remarks with highlights of some of the key initiatives for the balance of 2018. The impact of full year adjusted earnings related to the new revenue recognition standards is expected to be approximately $7 million or $0.02 per share.

We are in the early stages of this new partnership and look forward to expand the health and wellness areas of the JCPenney business. What I said in my prepared comments more is that issues in dotcom were the most significant from a year-over-year impact. We continue to see improvement in our toy business specifically with the competitive dynamics in the marketplace. Relative to the markdowns and relative to our gross margin we took actions throughout the quarter.

Kimberly for appliances first we delivered 15% comp in appliances for the quarter. But there is no one that's a silver bullet, it's a combination of a lot of things very similar to what we are able to deliver in Q1. We have certain categories in women's apparel that we are updating on a monthly basis and that's something that we've never done before. Error in this transcript? Emails may offer personalized content or ads.

JCPenney focusing on gross margin

JCPenney is relying on soft home, apparel and jewelry to help drive margin improvement.

All other components of net periodic pension costs and income are now recorded in a separate line item below operating income. Our new guidance is as follows. And finally, we continue to position JCPenney to take market share from ailing competitors. Because of some of the supply chain process challenges that we face we made decisions on some holiday goods to just take pricing and liquidation actions.

There was no designated period when we did more or less. So it's a dynamic market place, we are paying very close attention to it and we're prepared to make sure that we can gain market share where it makes sense. It exceeded our internal forecasts and we are very pleased with that business. Relative to gross margin, Jeff outlined some of the key things that we are working on and we will continue to work on.

Let us know . Learn more . Home was not listed among the top performing areas during the quarter. Deze site gebruikt cookies Meer info lees je hier. That's on top of more than 5,000 layoffs in 2017, after JCPenney decided to close nearly 140 stores . Ellison stressed during the conference call that JCPenney will be able to get back on track. Terms under which this service is provided to you. In fact without the impact of weather we estimate our comp sales would have been a plus 1.5% for the quarter.

It is important to note service costs do not impact our operating cash flow and it is funded through the pension trust. Now moving to another key financial metrics and expectations for Q2 of 2018. One area where we see significant share capture opportunity is in our home refresh categories. We did not want to carry the inventory into the upcoming quarter. That is really reflective in how well men's apparel performed in spite of some weather challenges we saw in the Midwest and the northeastern parts of our geographic areas.

So from a women's apparel standpoint we continue to be very pleased with the work that Jodie and her team are doing in women's apparel. We're in the process of evaluating how we can make that business work with a smaller footprint because we have stores that are just square footage constrained. In the explanation I've just provided with Kimberly regarding the issue within the holiday supply chain and process related issues with dotcom, it's not going to repeat itself.

Contact us to add your company to our coverage or use transcripts in your business . Read more from Do you know how much you could save by refinancing? Within the department, the top categories were appliances, furniture and mattress – areas that will receive more attention this year. For the first quarter ended May 5, 2018, total net sales at J. It has about 860 left. He highlighted a partnership with beauty and jewelry goods leader Sephora, as well as JCPenney's recent moves to start selling toys and appliances.

Despite the short-term weather impact in April we are maintaining our annual guidance of flat to up 2%. For the first quarter total net sales decreased 4.3% versus last year, while comp sales increase 0.2%. Interest expense was $78 million this quarter versus $87 million last year. Comp sales in the second quarter are expected to be in the middle of our annual guidance range. Over 70% of our customers are home owners and we have a large competitor in the space donating market share.

JC Penney is tumbling as guidance disappoints and cold weather weighs on sales

So specific categories beginning with active we continue to see great growth in our active brands. We're pleased with our performance thus far and our best performing stores tend to be stores that share a mall with Sears, which gives us confidence that we can compete head to head very well. Thank you. Regarding pricing are you feeling good about the consumer reception of pricing and simplification in terms of being competitive on the right key items and balancing how you communicate that message?

Need cash? For the first quarter ended May 5, sales fell 4.3% to $2.58 billion, with comp ticking up 0.2%. Commenting on the first quarter trading, Marvin R. JCPenney just can't keep up with Amazon ( AMZN ) , which is dominating the digital retail world. The numbers don't lie, though. Penney (JCP) J. We have an expectation that we will continue to benefit from our home refresh and beauty growth initiatives as well as the ongoing enhancements in apparel.

During the first quarter we completed the sale of our Milwaukee-Wisconsin distribution facility and recorded a gain of $12.5 million. We expect second quarter cost of goods sold to decrease compared to last year. This is arguably the most challenging and competitive retail market that we have seen in over 50 years. I mentioned that our May month to date sales performance is strong. So all of these things give us a significant amount of confidence.

We will be leaning more heavily into Nike as we move forward, the expansion of Adidas and the other active brands and also our own private label Xersion brand. Relative to gross margin and ecommerce, we have to take pricing actions and clearance actions to liquidate dotcom holiday inventory. And you know maybe bigger picture. So I think those two. Search Transcript This transcript Find All transcripts Find Compare To: All JCP Transcripts Other Companies in this sector Live Chat + Live Chat - We apologize for the inconvenience.

Calypso St. Some other traditional retailers, including Walmart ( WMT ) , Target ( TGT ) , Best Buy ( BBY ) and Macy's ( M ) , have taken steps to remain competitive — and have been rewarded by investors. Continued red ink and a high debt load are a huge problem. Richard Magnusen - B. Now let me discuss briefly gross margin. The comp sales improvement for the quarter was driven by an increase in average unit retail and units per transaction.

SG&A dollars in Q2 are expected to be down versus last year. These financial improvements have stabilized our company and positioned JCPenney to take advantage of available market share opportunities as other retailers continue to struggle. Then one other point I would add to that is that with the first quarter the mix of apparel was actually down in our overall composition of our sales. And then just a follow-up on the expense front what's your estimates for underlying asset sales in this year?

And so we continue to see a great progress for the quarter. The good news is we have store fulfillment capabilities. So as we think about revenue per customer is about introducing things for our existing customers that they are unaware that are available at JCPenney. On pricing we continue to focus on simplification. The chat platform is currently undergoing maintenance. How to pay off your house ASAP (So simple it's unbelievable) Pay off your house at a furious pace if you've not missed a payment...

JCPENNEY REPORTS FIRST QUARTER 2018 FINANCIAL RESULTS

PLANO, Texas - (May 17, 2018) - J. C. Penney Company, Inc. (NYSE: JCP) today announced financial results for its fiscal first quarter ended May 5,

But JCPenney is lagging, and investors are running out of patience. That's why Wall Street thinks the clock is ticking for JCPenney. Good day, ladies and gentlemen, and welcome to the Q1 2018 JCPenney Earnings Conference Call. So for the quarter there were three major factors that negatively impacted our gross margin performance. Starting this quarter credit income is now included in total revenues.

Thank you, Jeff. To that point we have identified over 300 malls where we will aggressively pursue sales opportunities given to us by other retailers in 2018. And then Jeff just to follow-up at start of the year you provided some guidance posts on gross margin, SG&A, credit income just other items that built into the EPS outlook. So I will talk about the marketing side outlet, Jeff will talk about asset assumptions.

Our women's active business grew double digits. So it's something that has been identified. You will be surprised the number of customers still don't know that we have Sephora shops in 75% of our stores. We think that in a high/low environment we have come to the conclusion that our customers prefer personals. To see the chat, try to refresh in about 5-10 minutes. Recommended For You Randi Zuckerberg gets real about working as a woman in Silicon Valley: 'I wished I...

Another troublesome sign: The company blamed bad weather for some of the weakness. It needs to get sales back on track sooner rather than later. At this time, all participants are in a listen-only mode. First and most significant to our gross margin impact, occurred within our dotcom business. Recall credit income was previously reported as an offset to SG&A in prior periods. During the quarter we also issued $400 million in senior secured second priority notes due 2025.

In closing retail in the U.S. is a multitrillion dollar industry and we believe there can be multiple winners. I know there is a lot of moving pieces now with the accounting changes. For marketing, we talked about marketing efficiencies. The thing that we want to make sure that we understand is all we are providing a service to the customer. And so we will continue our refined approach to the mix to what the customer is responding to.

And so you will notice more marketing along those lines and the specific of our marketing within the social media channels. It helps them to understand the value proposition. Chat is not supported in your browser version. Is Kevin Hart trying to enter the world of Pro-Wrestling? Social media stars are making an impact at retail as textiles companies seek out new brands and designs this month at the Surtex show and Licensing International Expo.

Our Terms of Service and Privacy Policy have changed. I would like to introduce your host for today's conference, Trent Kruse. We experienced mixed supply chain and process issues and negatively impacted in the prior year's gross margin. For the first quarter credit income was $87 million compared to $83 million the first quarter last year. We used the net proceeds from this transaction to successfully complete the tender offer for $375 million of aggregate principal amount of our outstanding unsecured 2019 and 2020 bonds.

JCPenney net sales drop 4.3 percent in Q1

For the first quarter ended May 5, 2018, total net sales at J. C. Penney Company, Inc. (JCPenney) decreased 4.3 percent to 2.58 billion dollars compared to 2.

So as it relates to our margin we are expecting our margins to improve over the course of the year. Our impressions were actually up 13% for the quarter. And so that we are testing in a couple of different markets, a couple of different iterations. In addition our Liz Claiborne brand we saw a great success in Q1. And then Jeff I just had a follow up on SG&A. And we have -- we're behind as relates to active wear.

Please upgrade your browser or use a different browser, such as Google Chrome. MTN DEW KICKSTART goes i... Progressive Business Media . Macy's, which reported strong results on Wednesday, didn't think the cold and snow was a problem. By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service . All right, thank you Kevin and good morning, everyone. Second, we executed store cleaners markdowns to address slow selling apparel categories.

Our capital allocation priority remains to deleverage the balance sheet through debt retirement at maturity or proactive refinancing and to rebuild cash balances. First as we've already discussed a key focus this year is enhancing our apparel offerings to better align with customer preferences. Can you give us an update on your free cash flow guidance, are you reiterating that this morning? As it relates to credit income, our outlook for credit income has not changed.

Our next question comes from Jeff Van Sinderen with B. We have continued plans to continue to lean into the Liz Claiborne brand and continue to improve the overall women's. Could you just describe the reduction of leasing expense associated with remaining amortization again on sale of a lease hold interest last year? And the last component of revenue per customer is our special size business. But we are making great progress.

Ladders Survey: 44% of executives have approached employees 'about Ladders Mark Zuckerberg to Harvard's Class of 2017: 'Purpose is what... All rights reserved. CEO Jeff Gennette told analysts that "we didn't see really any material difference in our business based on weather." Related: People are still shopping at Macy's. Contact Us Closed Captioning Site Map > Most stock quote data provided by BATS.

We're committed to running the business for the long run and not just the quarter. All divisions, except women's specialty comped positive for the combined February and March period. We remain confident to fund near term maturities from free cash flow. We remain focused on categories that offer the greatest opportunity for growth particularly special sizes, activewear, dresses, contemporary and casual sportswear.

Can you help quantify the impact of the calendar shift on your 1Q comps. If you combine our online and store traffic we had positive traffic because of omnichannel retailers you just can't look at traffic in the traditional way. Hello this is Richard Magnusen in for Jeff Van Sinderen. We've made significant investments in our ecommerce technology platform over the last 18 months including as Marvin called our mobile platform.