J. C. Penney Company Inc. (JCP - Free Report) once again fell short of expectations, with its turnaround plan failing to deliver the desired results. The company remained in the red with adjusted loss per share of $2.16 in the second quarter of fiscal 2013, dashing all hopes of recovery, at least in the near term.
The loss incurred was wider than the loss of 37 cents in the year-ago quarter. The Zacks Consensus Estimate for the quarter was a loss of $1.13.
Including one-time items, the quarterly loss came in at $2.66 compared with a loss of 67 cents in the prior-year quarter.
The company’s restructuring initiatives have been crumbling as it is exhibiting no signs of improvement. Alongside, J. C. Penney is constantly lagging its peers, Target Corporation (TGT - Free Report) and Kohl’s Corporation (KSS - Free Report) .
The company’s quarterly sales of $2,663 million plunged 11.9% year over year and fell short of the Zacks Consensus Estimate of $2,746 million. Comparable store sales decreased 11.9% year over year as its earlier pricing and marketing strategy failed to lure customers.
Gross profit plummeted 21.6% to $787 million, whereas gross profit margin contracted 360 basis points to 29.6%, signifying lower sales and increased markdowns to clear inventory.
J. C. Penney’s adjusted operating loss significantly widened during the quarter and came in at $385 million compared with an adjusted loss of $74 million in the year-ago quarter.
In a major development, Bill Ackman resigned from J. C. Penney’s board, few days after Ackman publicly criticized the functioning of the board. Ronald W. Tysoe, former Vice Chairman of Federated Department Stores Inc., now Macy’s Inc. (M - Free Report) , took his place. The company stated that it will also be naming another director in the near future.
Other Financial Details
J. C. Penney ended the quarter with cash and cash equivalents of $1,535 million, long-term debt of $4,850 million and shareholders’ equity of $2,320 million. The company incurred capital expenditures of $439 million.
Currently, J. C. Penney holds a Zacks Rank #3 (Hold), which could witness a downgrade in the near term.