J.C. Penney Co. reported a wider-than-expected loss and plunging sales in the third quarter as its shoppers are still not buying a new pricing plan that gets rid of hundreds of sales events.
The mid-price department store chain, based in Plano, Tex., lost 56 cents per share, or $123 million in the quarter ended Oct. 27. That compares with a loss of $143 million, or 67 cents per share, in the year ago period. Revenue dropped 26.6 percent to $2.93 billion in the quarter.
Analysts expected a 15 cent loss on revenue of $3.27 billion.
Revenue at stores opened at least a year fell 26.1 percent. The measure is considered a key indicator of a retailer's health.
During a meeting with investors Friday, CEO Ron Johnson, who has been trying to overhaul Penney's business, from pricing to what it carries in the store, said that the company will constantly be learning and tweaking the strategies. But he remains committed to his new pricing plan. Some analysts, however, say his promise to not waver is showing some signs of cracking.
In October, Penney emailed to its most loyal customers an incentive to come back: $10 off their next purchase. Some analysts believe it's just a coupon rebranded. Johnson said that move wasn't a departure and said he will be looking for other ways to bring back shoppers.
Q: Are you backpedaling?
A: For years, I have given my son a birthday card and put in a $10 bill. He has never said, "Dad, thanks for the coupon." He says, "Thanks for the gift." We have a lot of customers we know that we haven't seen because we used to track them through financial incentives. And so we said let's give the gift of $10 that they can come in the store and buy anything they want, but check out the new JCP. I think a $10 gift is an act of generosity like a free haircut and you may call it what you want, but this is not a change in strategy. It's just smart business.