JCPenney widened its loss in the third quarter to $100 million from a deficit of $17 million a year ago. Sales slid 3.8 percent year-over-year to $1.36 billion, though activewear showed broad strength, and Nike and Skechers ranked among the strongest sellers.
The figures were included in a regulatory filing from Copper Property CTL Pass Through Trust, which was established as part of Penney’s bankruptcy filing to acquire 160 JCPenney stores and six distribution centers.
Comparable store sales were down 0.4 percent in the latest quarter and off 3.5 percent in the trailing twelve months.
Including credit card income, total sales were down 5.4 percent to $1.42 billion. Credit income declined by $27 million to $66 million due to a one-time accounting benefit in the year-ago period.
The filing stated, “Beauty, fine jewelry and home all continued to deliver strong performance in the third quarter. Activewear across all categories, all genders and age groups also outperformed during the period. children’s showed significant improvement along with women’s dresses, handbags and petites. The best performing private brands include Xersion and Modern Bride, alongside strong national brand performances from Van Heusen, Haggar, Nike, and Skechers.”
Gross margins were down slightly to 38.0 percent from 38.7 percent a year ago. Gross margin improvement was seen in beauty, home and children’s categories. The decline reflects headwinds from distribution and tariff-related expenses.
Selling, general & administrative expenses were reduced to $588 million from $601 million a year ago, driven by lower administrative expenses, advertising and technology spend in the period. The operating loss was $79 million, compared with an operating income of $2 million.
In the nine months, sales declined 4.0 percent to $4.08 billion from $4.25 billion. The operating loss was reduced to $5 million from $57 million a year ago. The net loss was trimmed to $60 million from $113 million a year ago.
The filing said JCPenney has identified $150 million in operational synergy opportunities that it expects to realize through fiscal 2027 from its merger with the SPARC Group. The merger was completed in January 2025. To date, roughly $100 million on those opportunities has been implemented or is being actioned in fiscal 2026.
SPARC Group’s brands include Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica.
Subsequent to the quarter’s close, JCPenney repaid all the amounts outstanding on its $1.5 billion credit facility as of the end of the third quarter and has no outstanding debt on its balance sheet. Taking into account its available cash balance and borrowing capacity under its asset-based lending facility as of the end of December, the company had over $1 billion in liquidity available to fund ongoing operations and make future strategic investments.
Image courtesy JCPenney
