Private Label Helping Drive Margin Improvement At JCPenney

Third quarter net sales at JCPenney were down year-over-year as the department store retailer also reported a net loss for the three month period ended October 28.

Net sales were $1.533 billion, down from net sales of $1.717 billion in the comparable quarter the previous year. The company reported a net loss of $30 million as compared to a net loss of $17 in the prior year quarter. 

In offering an update on operations as part of a financial filing, company officials said its “Make It Count” brand proposition has had a favorable impact on customer frequency — up 300 basis points — while digital sales as a percentage of total sales were up 200 basis points over the prior year. The average customer sale also increased 11%. 

Company officials also reported improvement in merchandise gross profit rates — up 270 basis points — with the retailer’s private label product assortment accounting for a part of that increase. Notable category margin improvements were seen in women’s apparel, adult active, footwear, and handbags.

Additionally, JCPenney private brands such as St. John’s Bay and Liz Claiborne continued to see selling margin improvements, company officials said.

Beyond apparel, the retailer’s exclusive cookware collaboration with Chef Jenny Martinez drove additional customer engagement both in-store and online through personal appearances and digital events.

“Along with these important brand initiatives, ongoing discipline in promotional and markdown activities, supported by strategic investments in planning and allocation tools, results in bottom line benefits and further improved the inventory positions for the company,” JCPenney officials wrote in the filing. “Overall inventory was down 12% over the same period last year.”