J.C. Penney posts huge loss

NEW YORK Boy, it just wasn't J.C. Penney's (JCP) year.

The mid-priced department store chain on Wednesday reported another much larger-than-expected loss in the fiscal fourth quarter and a nearly 30 percent plunge in revenue in the latest sign that shoppers aren't happy with the changes it's made in the past year.

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The results mark a full year of massive quarterly losses and revenue declines since J.C. Penney Co. began a turnaround strategy that included ditching most of its coupons and sales events in favor of everyday low prices, bringing in new designer brands such as Betsy Johnson and remaking outdated stores to give them an outdoor mall kind of feel.

The quarterly performance also puts additional pressure on CEO Ron Johnson, the former Apple Inc. executive who was brought in about a year ago to turn the stodgy retailer that was losing money into a hip and profitable company that can compete with the likes of Macy's or H&M. In the past year since Johnson rolled out his plan, though, even once loyal customers have strayed away the 1,100-store chain.

Teresa Cansell, for instance, used to make the 45-mile trek from her farm near Leon, Kan., to a Penney store in Wichita about once a month. But since Penney started making changes to its pricing and merchandising last year, she's only been twice. And on her latest trip in December, she walked out empty handed because she couldn't find a leather jacket she wanted.

"I loved the old J.C. Penney. I liked the coupons," Cansell, 53, said. "I used to go to Penney every time I got them in the mail. I would buy a ton of stuff."

Apparently, Cansell isn't the only shopper who feels that way. Penney's results have been on a downward spiral for the past year.

During the fourth quarter that ended Feb. 2, Penney's revenue at stores opened at least a year - a figure the retail industry uses to measure of a store's health - dropped 31.7 percent. That compares with drops of 26.1 percent in the third quarter, 21.7 percent in the second quarter and 19 percent in the first quarter. Analysts had expected a decline of 26.1 percent.

Penney, based in Plano, Texas, lost $552 million, or $2.51 per share, compared with a net loss of $87 million, or 41 cents per share in the year-ago period. Excluding charges related to restructuring and management changes, the company's adjusted loss for the quarter was $427 million, or $1.95 per share.

Analysts had expected a loss of 23 cents on revenue of $4.08 billion, according to research firm FactSet.

For the year, Penney's lost $985 million, or $4.49 per share, compared with a loss of $152 million, or 70 cents per share, in the previous year. Revenue dropped 24.8 percent to $12.98 billion from the previous year's $17.26 billion.

"It's the worst performance I have ever seen by a company in one year," said Walter Loeb, an independent retail consultant.

On the news, which was reported after markets were closed for the day, Penney shares fell nearly 9 percent, or $1.89, to $19.27 in after-hour trading. Investors, who initially sent Penney shares soaring 24 percent to about $43 after the company announced the everyday pricing plan in late January of last year, have pushed them down by about half since early last year and the company's ratings are in junk status.