J.C. Penney Raises Outlook
Jennifer Marks -- Home Accents Today, May 4, 2009
J.C. Penney took a new tack at its annual analysts meeting here last month. A series of full-day presentations by each division head was replaced by a set of 45-minute round-table discussions with various segment execs, lead by chairman and ceo Mike Ullman.
If the format was more casual — speakers were seated in leather armchairs from the new Cindy Crawford Style collection— the message was fairly consistent: JCPenney is positioning for strong growth and greater market share as the economy begins to improve.
"The strong get stronger," said Ullman. "There's plenty of runway ahead of us."
In fact, JCPenney concluded the meeting by raising its first quarter estimates for the second time in three weeks. The retailer now expects first-quarter earnings per share to come in flat to slightly positive. Initially, JCP projected an ESP loss of 20 to 30 cents. That was revised to a loss of 5 to 10 cents when Penney released its March sales results in early April.
"Our inventory is now aligned with our projected sales month to month," said Ullman. "I'd say what we're seeing today is a more predictable plan. It's not one we like, but it's one we planned."
Asked about the government's stimulus program, Ullman said he doesn't expect it to impact Penney's sales. "We don't see it as a factor for increasing business in the second half for our customer. Our customer is employed," he said.
Home has stabilized, according to Ken Hicks, president and chief merchandising officer. "I wouldn't say at this point the home business is healthy and ready to go out and run a marathon," he cautioned. But execs noted that with fewer competitors left in the home furnishings arena, JCP is poised to capture market share, particularly once the economy improves.
The company also is charging ahead with digital marketing and merchandising efforts. Following the meeting, JCP demonstrated the new Find More interactive flat-screen panel that it will begin testing in home departments by mid-May. If a shopper wants to locate an item not stocked in the store — purple towels, for example — she can search the kiosk and print out a receipt with the appropriate bar code. The receipt will be scanned when she checks out and the merchandise shipped to her home. Alternatively, she can select items and send an e-mail to herself for review later.
"This is not dot-com in the store. If someone wanted to do dot-com they'd stay at home," Tom Nealon, evp and chief information officer.
Find More will test initially in four Dallas stores before testing elsewhere. "It will eventually run on your hand-held phone," he said.