J.C. Penney’s struggles carried into the first quarter after a weak holiday period, with the department store posting another decline in sales, according to financial filings released Thursday. Net sales fell 4.6% from a year earlier to $1.25 billion, while gross margin slipped by about 20 basis points as the company faced tariff-related costs, changes in its product mix and heavier promotions.
The company’s net loss improved slightly, narrowing nearly 6% to $65 million. Inventory also edged down 1% to $1.6 billion. J.C. Penney said its store card generated $64 million in revenue, up $2 million from the same quarter last year.
Mixed quarter as broader retail sales held up
The quarter came during a period when retail spending was relatively solid, including at other department stores, making J.C. Penney’s performance stand out as a weak spot. According to GlobalData managing director Neil Saunders, the chain has not fully benefited from stronger consumer spending and still has more work to do to improve its customer appeal and become a more compelling destination.
There were some positive signs. The company said its spring “Really Big Deals” event helped traffic and sales, while digital investments lifted online traffic by 5% and increased average order value. Stronger categories included activewear, jewelry and home, while women’s apparel benefited from private-label brands St. John’s Bay and Liz Claiborne. Beauty and salon sales also received a lift from fragrance launches.
On the financial side, selling, general and administrative expenses declined slightly, and J.C. Penney said savings from its tie-up with Catalyst Brands are running ahead of schedule. The retailer also said it has no outstanding long-term debt. It may receive additional support from tariff refunds after U.S. Customs and Border Protection expanded eligible refunds, with the company expecting some in the second quarter and potentially more in fiscal 2026 and as late as 2027.
Source: retaildive.com
