JC Penney Cites Ousted CEO's Plans in Sales Miss

Ron Johnson, former JC Penny CEO
Ron Johnson, former JC Penny CEO

JC Penney on Tuesday said it expects first-quarter revenue to be down about 16 percent from a year earlier, which it attributed in part to strategies set up by recently ousted CEO Ron Johnson.

"The sales decline in the first quarter is partially attributable to construction activities in connection with the transformation of the home departments in 505 stores," The company said in a statement. "Results for the quarter also reflect...prior pricing and marketing strategies, which are being changed under new leadership," the company said.

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In 2012, Penney suffered a steep drop in sales after Johnson ended most coupons and sales events which put off Penney's longtime, price conscious shoppers.

Johnson was ousted last month and replaced by his predecessor Myron Ullman, who had increased the pace of sales and overseen an ad campaign aimed at winning back shoppers.

In releasing preliminary first-quarter results, JC Penney said it expects revenue of about $2.64 billion, down from $3.15 billion in the year-earlier period and the $2.74 billion analysts currently expect, according to a consensus estimate from Thomson Reuters.

The retailer said same-store sales in the first quarter fell 16.6 percent. Analysts had been expecting a smaller 13.2-percent decline.

The company also said it had $821 million in cash on hand as of May 4. The department-store chain will report full results on May 16.

Last week, Penney said it had lined up a five-year, $1.75 billion financing deal with Goldman Sachs, its latest move to shore up its finances as it looks to stabilize its operations.