- J.C. Penney has picked Jeffrey Davis as its new chief financial officer, with his appointment effective Tuesday, according to a company release. He succeeds Andrew Drexler in the CFO role, who has been serving in the interim since Edward Record stepped down from the spot in July.
- Davis was most recently CFO of Darden Restaurants, which owns the Olive Garden and other chains, where he oversaw the company’s real estate acquisitions along with traditional CFO responsibilities. Before that, he was CFO for Walmart’s U.S. store operations and had worked in various finance roles for Lakeland Tours, McKesson Corporation and The Hillman Company.
- As CFO and executive vice president at J.C. Penney, Davis will, among other things, look for profit growth areas, help optimize pricing, manage corporate costs and inventory levels, and work to reduce debt, according to the company.
Davis joins J.C. Penney as it takes steps to recharge growth, but the department store retailer is still fighting off a sectorwide slump, shuttering stores as apparel sales sag.
In May the company reported a first quarter net loss of $180 million, worse than the $68 million net loss in the year-ago period, as overall sales fell 3.7% to $2.7 billion (from $2.8 billion a year ago) and same-store sales fell 3.5%, missing analyst forecasts. At the same time, investments in pricing and merchandising systems, combined with growth in appliances and e-commerce, led to a 10 basis point increase in gross margin compared to the year-ago quarter.
There were other bright spots in Penney’s most recent earnings report. Same-store sales rose in home, fine jewelry and salon categories, as well as the Sephora concession shops. And despite that tough quarter, the company reaffirmed its 2017 full year guidance. Executives expect same-store sales growth to range between a 1% decline and a 1% rise with gross margins rising 20 to 40 basis points over the prior year.
Despite improvements in women’s apparel, which dragged down results last year, the retailer must redouble efforts in that category and continue marketing efforts to entice shoppers into stores, GlobalData Retail managing director Neil Saunders said in a note emailed previously to Retail Dive.
“Despite the enhancements made to date, the offer is still not compelling enough to drive sales,” Saunders said of J. C. Penney’s fashion play. “Spring collections showed some signs of improvement, but there is much more work to do here if J.C. Penney is to turn this into a winning category.”
But the company’s real star is the Sephora concessions, Saunders said. “The impact of having a popular beauty player as part of the offer cannot be underestimated,” he said “Without it, customer traffic and sales would have tumbled far further and faster, and J.C. Penney would have attracted far fewer younger shoppers.”