J.C. Penney Co., working to rebound from a $985 million loss, said Tuesday its sales decline slowed in September and that the improvement will last through the end of the year.
Sales at stores open at least 12 months fell 4 percent in the fiscal month ended Oct. 5, the Plano, Texas-based company said in a statement. Same-store sales dropped 12 percent in the quarter through Aug. 3.
Chief Executive Officer Mike Ullman is working to turn around the chain after his predecessor Ron Johnson’s failed attempt to transform J.C. Penney into a destination for younger, wealthier shoppers.
Ullman has reinstituted sales events, revived popular private-label brands such as St. John’s Bay and tried to clear slow-selling merchandise from the home sections, all while raising cash through borrowings and a share offering to shore up the balance sheet.
Ullman “has been restoring the core assortments that the J.C. Penney customer has been accustomed to seeing,” said Mary Ross Gilbert, an analyst with Imperial Capital LLC in Los Angeles. “They are making improvements, and we are seeing it.” She rates the shares underperform, the equivalent of a sell.
The company, which raised $785 million in cash from a share sale last month, said it expects to have more than $2 billion in liquidity at the end of the fiscal year.
Sales of women’s apparel, J.C. Penney’s largest business, rose in September, the company said, without specifying how much. Men’s apparel, jewelry and women’s accessories also are performing better than the company average, the company said.
Penney shares are down about 60 percent this year, the worst performance in the 10-company Bloomberg U.S. Department Stores Index.
Penney has said it will close some of the home boutiques and will devote extra floor space to towels, cooking utensils and more profitable categories such as luggage and window treatments.
Since Ullman returned in April, J.C. Penney has borrowed about $3.1 billion — consisting of a $2.25 billion loan and an $850 million drawdown from its credit revolver — to help fund its turnaround. The company hasn’t turned a quarterly profit since mid-2011 and lost $1.6 billion in the past year on a 22 percent drop in revenue.