JC Penney just reported their earnings .... or lack thereof and it was worse than the terribly low guidance. Suffice it to say that this company is not firing on all cylinders. Penney's loss for the fourth quarter was $428 million bringing their one year total loss to $985 million. The estimated loss before the earnings report was 18 cents a share making the $1.95 a share loss that much more dismal. Revenues decreased 28%.
There is now a very large spot light on the management team's decision to remove sales and discounts from their pricing display. Change and innovation are necessary for businesses to compete and survive. But this is just a display of change for change sake. Not only is it common sense to use sales and discounts in a retail discount store, it is a clear display of change for change sake. Definitely a head scratcher. This is a decision with terrible results that a new management team will not be able to recover from. Penney's will now have to spend more money to employ the same discounts and sales pricing they had before the change. Deploying resources to stand still fast does not bode well for this management team. This company is in a free fall and drastic changes will be forthcoming.
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