J.C. Penney is out today with another quarter of brutal sales figures, and it rather explicitly says that former CEO Ron Johnson is to blame.
For the sixth consecutive quarter, the company reported a loss. Penney said it lost $586 million, or $2.66 a share, for the three months ended Aug. 3, compared to a loss of $147 million, or 67 cents a share a year earlier.
Revenue came in at $2.66 billion, down from $3.02 billion in the same quarter last year. Same-store sales, meanwhile, were down 11.9 percent year-over-year. It missed earnings estimates with a loss of $2.66 per share. Analysts were expecting a loss of $1.07 a share on revenue of $2.77 billion.
Those are ugly numbers, but par for the course for J.C. Penney (JCP), whose struggles over the last two years have been well-documented. While growth had stagnated even before the arrival of Johnson, there's no doubt that the company's free-fall was largely owing to Johnson's extreme makeover of the century-old retail chain.
And the company did not hesitate to blame its ongoing problems on the former Apple (AAPL) executive, who left J.C. Penney four months ago.
Right off the bat, the earnings report says that its same-store sales were "negatively impacted by the company's failed prior merchandising and promotional strategies, which resulted in unusually high markdowns and clearance levels in the second quarter." It also points to "the lengthy renovation and disappointing re-merchandising" of its home department, another of Johnson's pet projects.
In an earnings call, new CEO Mike Ullman said that the company was working to get back to prior stock levels of its St. John's Bay house brand. That, too, was a reference to the prior regime's missteps: Johnson had done away with that brand, alienating much of the retailer's customer base. Ullman also alluded to "the errors of the past" and added that "we have work to do to rebuild customer trust and loyalty that was impacted by the mistakes of the past."
The finger-pointing is far from unjustified, and there's no doubt that the new regime has its hands full cleaning up prior management's messes. And from a financial perspective, it's fair to point out that sales figures are impacted by its need to compensate through heavy discounting.
Still, the blame game here feels unnecessary. This is, after all, a company that spent the last two weeks in the news for its ugly boardroom infighting with activist investor Bill Ackman. For Ullman to repeatedly harp on his predecessor's failures isn't going to change anyone's impression that the company's management is dysfunctional.
It's not all bad news for J.C. Penney. Despite the earnings miss, shares opened 8 percent higher Tuesday morning -- but gave back most of those gains -- largely owing to some positive trends: The company touted a 470-basis-point uptick in same-store sales over the first quarter of the year, and it also notes that it's seen strong sales during the back-to-school season. Perhaps we are indeed seeing the beginnings of a recovery for the struggling retailer -- or perhaps it simply speaks to the low expectations that it's set for itself over the last two years.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.