JCPenney Sales Increase Thanks to Aggressive Turnaround Strategy
Following years of turmoil, JCPenney pleasantly surprised Wall Street executives when it reported an increase in sales earlier this year – one that was greater than expected, causing its stock to surge. The retailer said Q3 comparable sales had risen 1.7% year over year. That’s more than double both analysts’ expectations and the company’s forecast.
A first in a great while for JCPenney, this increase proves that the retailer’s decision to purge excess inventory and close under performing stores is a strategy that is beginning to pay off. To continue the upswing, the retailer raked in $2.8 billion in revenue for the quarter and its stock jumped more than 15%, surprising many.
While many retailers ― department stores, in particular ― have struggled to recapture foot traffic and make innovations due to lost sales to Amazon and other online players. On a recent earnings call, CEO Marvin Ellison noted that the company is taking “bold but necessary steps” to help “reset” major parts of the business in order to combat today’s retail environment.
According to Ellison, the retailer leveraged deep discounts to clear out slow-moving inventory and expanded its casual and contemporary offerings. It also plans to close up to 140 stores (14% of its locations) in the months ahead. “The goal is simple,” said Ellison. “We wanted to flatten the organization, streamline decision-making, and increase agility in this rapidly-changing retail environment.”
Discover more on how JCPenney is transforming its organization at NRF 2018 on Tuesday, January 16 at 3:30 pm. JCPenney chairman and CEO Marvin Ellison will share insight during the roundtable discussion at the “Transform Your Culture: Why CEO Action is Imperative to Diversity and Inclusion in the Modern Workplace” session.