J.C. Penney hasn’t had to release its finances since 2020. Here’s how the retailer is doing. (2024)

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The “C” in J.C. Penney stands for “Cash,” the middle name of founder James Cash Penney, but the department store is struggling to generate much in its post-bankruptcy years.

As of Oct. 29, the company’s cash and cash equivalents had dwindled from $354 million the previous year to $121 million. In the first nine months of 2022, net income plummeted 43.6% to $176 million, according to filings with the Securities and Exchange Commission.

“It is unsurprising that J.C. Penney has seen performance slide,” GlobalData Managing Director Neil Saunders said by email. “The range is as bland as ever, with not much to excite shoppers.”

In an email, the department store declined to elaborate on the figures.“As a privately-held company we cannot disclose detailed financial information, but we can say that JCPenney is in the best financial position we’ve been in years,” the retailer said. “We’re operating on strong financial footing that allows us to continue making strategic investments to ensure we are delivering for our customers.”

However, detailed financial information on the company is being provided to the SEC by Copper Property CTL Pass Through Trust, a property trust tasked with selling some of its stores.The available filings don’t include comparable sales, though the company said in its email that those are up in some areas.

“Despite unprecedented inflationary pressures to consumer discretionary spend, we experienced positive comps in key divisions and have new initiatives driving traffic and customer interest,” the company said. “We are highly encouraged by this momentum and look forward to our continued growth.”

The filings also don’t yet include J.C. Penney’s fourth quarter results.But sales in the holiday months of October, November and December fell an average 7.5% year over year, according to calculations from Bloomberg Second Measure, which do not reflect raw sales data.

J.C. Penney's sales have stayed relatively steady since 2021, but profits are declining

Net sales, in billions, and net income or loss, in millions, from the first quarter of 2021 to the third quarter of 2022.

Mall REITs Simon Property Group and Brookfield bought the retailer out of bankruptcy late in 2020, after the pandemic exacerbated its years-long struggles.Under its new owners,(brand management firm Authentic Brands Group now also owns nearly a 17% stake), the retailer has launched several initiatives that it says are contributing to growth, generating “excitement” and attracting new customers. Its new men’s apparel brand Mutual Weave “is leading growth in our men’s division just one year after its launch,” and its recent tie-up with fashion designer Prabal Gurung “has been extremely well-received by customers,” the company said in its email.

J.C. Penney has also greatly expanded its beauty assortment since losing its Sephora partnership to Kohl’s.

J.C. Penney hasn’t had to release its finances since 2020. Here’s how the retailer is doing. (1)

“We’ve seen success with the strong launch of our hyper-inclusive JCP Beauty offering, where three-quarters of our customers are new or reactivated,” the company said.

But overall,“little else has changed,” Saunders said.“The general impression is that J.C. Penney is a business bumping along the bottom with very little ambition to pull itself up.”

Simon Property Group CEO David Simon begs to differ. Simon Property Group didn’t immediately respond to a request for comment for this article.But in February, David Simon told analysts that, while J.C. Penney didn’t escape last year’s industry downswing as inflation undermined discretionary spending, the retailer is in a good place.

“It didn't have the [success of]year of '21, but we're very pleased where that company is positioned, and we're extremely pleased with the management team and all that they're doing to reinvigorate the brand that means so much to that consumer in those communities,” he said. “And we're taking a different tack than others that have managed or owned that brand.”

J.C. Penney’s 2021 sales rose 30.5%, according to the indexed data from Bloomberg Second Measure, which excludes spending via gift cards, store-branded credit cards and some types of financing. According to the financial statements on Penney filed with the SEC, net sales that year reached $7.9 billion. In 2022, sales fell 8.3%, per Bloomberg Second Measure’s report. According to the Penney filings, net sales were down 2.5% in the first nine months of 2022.

In his remarks, David Simon called out Penney’s EBITDA, which reflects cash flow from operations when certain costs, like interest expenses, taxes and depreciation,aren’t taken into account.

“It has unbelievably profitable EBITDA,” he said, adding later,“It was very profitable from an EBITDA point of view.”

The metric is among the retailer’s most robust, though it is also declining. In the first nine months of last year, adjusted EBITDA fell 29.6% to $405 million.

The level of depreciation and amortization noted in Penney’s filings could indicate that the retailer is investing in stores with improvements like new fixtures, furniture or merchandise, according to John Heller,a director of advisory services at accounting and advisory firm Marcum. If so, that’s not reflected at many stores, according to Saunders.

J.C. Penney hasn’t had to release its finances since 2020. Here’s how the retailer is doing. (2)

Sources who are conducting research into J.C. Penney’s operations, who spoke on the condition of anonymity because they weren’t cleared to discuss their findings, found that, compared to 2019, sales at several brick-and-mortar Penney stores were down 25% to 30% in 2022. J.C. Penney declined to comment on that finding. In its email, the retailer said it has no plans to reduce its store count substantially, “although customers may see a few isolated store closures in the months ahead due to lease agreements, markets changes and performance, among other factors.”

Saunders sees little evidence of meaningful investment in most Penney stores, which he said “look increasingly tired and run-down.”

“Admittedly, J.C. Penney is in a tough part of the market where generating growth is hard,” he said. “However, when it was acquired out of bankruptcy there was some optimism that the new owners would invest and try to reinvigorate the chain. In reality, not much has changed and J.C. Penney hasn’t been shown any real love.”

J.C. Penney hasn’t had to release its finances since 2020. Here’s how the retailer is doing. (2024)


How is JCP doing financially? ›

For the full year ending in January 2023, JCPenney's net sales fell 3.4% year-over-year to $7.6 billion. Overall, department store sales dropped 1.5% over the first seven months of 2023, compared to a year ago, Census data shows.

What is the cash flow problem with JCPenney? ›

The “C” in J.C. Penney stands for “Cash,” the middle name of founder James Cash Penney, but the department store is struggling to generate much in its post-bankruptcy years. As of Oct. 29, the company's cash and cash equivalents had dwindled from $354 million the previous year to $121 million.

What are the financial results of JCPenney? ›

Net income in Q2 plunged 65% to $36 million. For the first half of the year, EBITDA tumbled 56% from the comparable period in 2022 to $147 million, per filings with the Securities and Exchange Commission.

What are the financial trends based on JCPenney past data? ›

JCPenney's peak quarterly revenue was $7.1B in 2008(q4). JCPenney peak revenue was $19.9B in 2006. JCPenney annual revenue for 2018 was 12.0B, -3.89% growth from 2017. JCPenney annual revenue for 2019 was 11.2B, -7.09% growth from 2018.

Is JCPenney improving? ›

JCPenney is spending $1 billion on store and online upgrades in latest bid to revive its business. Shoppers pass a J.C. Penney store in New York. JCPenney said Thursday it plans to spend more than $1 billion by the end of 2025 in a bid to revive the storied but troubled 121-year-old department store chain.

Is JCPenney making a profit? ›

“The company continues to prioritize maintaining a very healthy balance sheet with significant liquidity,” the SEC filing noted. JCPenney remains in profit despite steep drops on the bottom line. Net income plummeted 90% for the six-month period and tumbled 65% in Q2.

Is JCPenney in financial trouble? ›

JCPenney has around 670 stores today and has little debt for the first time in years. The company is owned by mall landlords Simon Property Group (SPG) and Brookfield Asset Management (BAM). The two firms rescued JCPenney out of bankruptcy for $1.75 billion in the fall of 2020.

Is JCPenney in debt? ›

JCPenney's debt of about $4 billion forced it into bankruptcy in May 2020. It now has $485 million in long-term debt and liquidity of $1.5 billion. Long-term debt was reduced by $500 million in December 2021.

What is the weakness of JCPenney? ›

SWOT Analysis of J. C. Penney: Strengths: Established brand, wide range of products, strong customer loyalty. Weaknesses: Declining sales, high competition, struggling financial position. Opportunities: Expanding online presence, potential for strategic partnerships, targeting new customer segments.

Why is JCPenney struggling? ›

The coronavirus pandemic and the shift to online shopping dealt a severe blow to JCPenney, leading to its bankruptcy filing on May 15, 2020.

Is JCPenney recovering? ›

J.C. Penney's retail arm was acquired through the bankruptcy court by Brookfield Asset Management and Simon Property Group. J.C. Penney emerged from bankruptcy in December 2020 with new owners, less debt and about 200 fewer stores.

What company took over JCPenney? ›

In late 2020, Simon Property Group (SPG) and Brookfield Asset Management (BAM)—two of the nation's largest property owners—purchased the company for $800 million. At the time of the bankruptcy, JCPenney held $4 billion in debt.

Did JCPenney lose Sephora? ›

Sephora didn't renew its 15-year contract with JCPenney and moved its in-store shops to Kohl's, which has said it plans to put Sephora in all 1,100 of its stores. About 600 are open now. Target has been adding Ulta Beauty in-store shops to its stores.

What does JC stand for in JCPenney? ›

And yet, after all that time, do you know what the J.C. stands for? Answer: Its founder — James Cash Penney — had a great name when it comes to money. Peoria and Champaign, by the way, still have J.C. Penney stores.

What was the result of change in strategy implemented JCPenney? ›

The answer: incomplete execution of the change. J.C. Penney attempted a complete transformation of its brand promise yet failed to infuse every customer touch-point — the merchandising, marketing, customer service and store environment — with its new character.

Is JCPenney laying off employees? ›

We are notifying you that JCPenney has made the difficult decision to close its stores and furlough (temporary layoff) a portion of our California employees because of the store closures necessitated by the health emergency due to the spread of COVID-19 and local and statewide shelter-in-place orders, which has ...

Is JCPenney growing? ›

JCPenney is on strong financial footing and is steadily increasing relevance and frequency with our core customers,” said Marc Rosen, chief executive officer of JCPenney. “We are poised for continued growth and know that the surest path to success is by focusing on our customers.

Who owns the majority of JCPenney? ›

JCPenney was ultimately purchased by Simon Property Group and Brookfield Asset Management. JCPenney – officially Penney OpCo LLC – is a department store chain with 667 stores across the United States.


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