Penney monthly same-store sales rise for first time since 2011
J.C. Penney on Thursday reported its first monthly same-store sales gain in nearly two years on the back of deep discounts and the decision to resume stocking merchandise that the retailer's long-time shoppers liked.
Shares were up 4.9 percent to $8.08 in pre-market trading after the company said comparable sales rose 0.9 percent in October. (Click here to see the latest quote.)
Penney, which has been offering steep bargains to win back shoppers after a failed attempt to go upmarket in 2012 led to a 25 percent sales drop, last reported a monthly same-store sales gain in December 2011.
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Chief Executive Myron Ullman attributed the improvement in part to the return of popular in-house brands including St. John's Bay, which were jettisoned by his predecessor Ron Johnson during Penney's ill-fated transformation last year.
Ullman came back to the helm in April with the task of stanching a sales hemorrhage after customers rejected Johnson's efforts to remake the 111-year-old department store by eschewing coupons and sales and offering trendier merchandise.
The return of Penney's aggressive promotions, aimed at luring back shoppers and clearing out remaining merchandise ordered by Johnson, will however dent gross profit margin for the third quarter, Ullman warned. But gross margin improved each month during the quarter, he added.
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Ullman also said the upcoming holiday season would be "extremely competitive."