PLANO, Texas (AP) -- J.C. Penney Co. says that its first-quarter revenue will likely fall 16 percent and is pointing fingers at prior leadership for part of that shortfall.
The struggling retailer fired its CEO Ron Johnson last month after only 17 months on the job and rehired his predecessor Mike Ullman.
Johnson, who took the helm in November 2011, made ambitious changes, including getting rid of most sales. Stores were updated, and new, hip brands were added to try and reinvent the retailer. While the strategy was designed to attract younger, wealthier shoppers, it ended up alienated loyal customers and caused sales to plummet.
For the year ended in February, J.C. Penney lost nearly a billion dollars and saw its revenue plummet 25 percent. The latest figures announced Tuesday show the malaise continues even as the company started adding back discounts during the quarter in February. Under Ullman's leadership, Penney's will reinstate more sales and coupons. Ullman is reassessing what other parts of Johnson's plan to keep and what to trash.
Penney's preliminary data released Tuesday show that total revenue for the period fell 16 percent year over year to $2.64 billion. That's worse than the average analyst estimate of $2.74 billion, according to FactSet. The drop is on top of a 20 percent decline that Penney had posted in the first quarter of 2012.
Its sales in stores open at least a year slid 16.6 percent, worse than the 13.6 percent decline analysts had expected, according to FactSet. In the first quarter of 2012, that same metric was down 18.9 percent.
The Plano, Texas, company attributes the decline to construction activity to revamp its home department at hundreds of stores and the pricing and marketing strategies of prior management, which are being changed under new leadership. The company is in the midst of revamping its home area in about half of its 1,100 stores. The department had been set to open this month, but that has been postponed because of construction delays to June.
J.C. Penney's first quarter ended only days ago so actual results may vary. It reports its full results on May 16.
The company released estimates in connection with a financing transaction. It said its cash at May 4 totaled $821 million. Late last month Penney confirmed that Goldman Sachs would provide it with $1.75 billion in financing. It would be secured by real estate and some of its subsidiaries.
Shares increased nearly 2 percent to $16.72 in after-hours trading following the announcement. The stock is down 51 percent in the past year.