Penney Intermediate Holding reported its JCPenney operations turned to a loss in the second quarter as traffic remained slow.
Net loss was $33 million versus net income of $36 million in the year-previous quarter.
Comparable sales slipped 7.7% in the quarter year over year. Net sales were $1.47 billion while total revenue, including credit income, was $1.53 billion, versus $1.61 billion and $1.68 billion, respectively, in the year-prior period, the company maintained. Operating loss was $14 million versus operating income of $55 million, in the year-earlier quarter.
According to a company statement, traffic overall remained soft during the period, but the overall trend for store trips improved when compared to fiscal 2023. The relaunch of the JCPenney Rewards program, initiated at first quarter’s end, prompted more than 830,000 new rewards member sign-ups and more than 30,000 new credit customers. Store Net Promoter Scores improved by more than four points versus last year’s second quarter, Penney reported.
In a research note, Pulse Ratings stated that the erosion of comparable sales and EBITDA and lower free cash flow generation in the second quarter were a cause for consideration, but the company’s relatively healthy balance sheet and liquidity indicated the business remains stable.
Penney Intermediate Holdings LLC is the direct subsidiary of Penney Holdings LLC, itself a direct subsidiary of Copper Retail JV LLC, formed to acquire JCPenny operating assets and related liabilities on December 7, 2020. The creation of Cooper followed the Simon Property Group and Brookfield Asset Management acquisition of JCPenney on September 9, 2020.
