NEW YORK — The worst may be over at J.C. Penney Co.
The beleaguered department store chain on Tuesday reported its sixth straight quarter of big losses and steep revenue drops as it continued to face challenges related to a botched turnaround plan spearheaded by its ousted chief executive Ron Johnson.
But investors sent Penney shares up 6 percent to nearly $14 — after having pushed the stock down nearly 70 percent in the last 18 months — in an expression of confidence that returning CEO Mike Ullman has started to stabilize the business.
Since he retook the top job in April after having occupied it from 2004 to 2011, Ullman has been bringing back coupons, frequent sales events, and basic merchandise like khakis and jeans that Johnson eliminated in a failed attempt to attract hipper, more affluent shoppers.
The latest report offered some encouraging signs that the move is beginning to pay off: Revenue improved from month to month during the quarter, and the decline in Penney’s online business slowed significantly in part due to the company’s move to veer from Johnson’s strategy and go back to operating its online businesses with its physical stores. The chain also said it is seeing an encouraging start to the back-to-school season.
Bernard Sosnick, a retail analyst at Gilford Securities, said based on the results, he expects Penney to get back to profitability by the fourth quarter. He also said he wouldn’t be surprised if during the first half of next year, the chain posted sales increases of 10 to 15 percent.
In the three-month period that ended Aug. 3, Penney lost $586 million, or $2.66 per share. That compares with a loss of $147 million, or 67 cents per share, a year earlier. Revenue was $2.66 billion, down 11.9 percent from $3.02 billion. Analysts were expecting a $1.07-per-share loss on revenue of $2.77 billion.
Revenue at stores open at least a year also dropped 11.9 percent, worse than the 8.3 percent analyst expected. However, the sales drop in the latest quarter is smaller than the 16.6 percent decline in the first quarter.