JC Penney CEO Quits, a Huge Blow to Retailer, Questions About Survival

By Douglas A. McIntyre Updated Jan 11, 11:19PM EST · Published May 22, 9:14AM EDT

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JC Penney CEO Quits, a Huge Blow to Retailer, Questions About Survival — © Thinkstock

J.C. Penney Co. Inc.’s (NYSE: JCP) CEO quit today, shortly after the retailer reported poor results. Marvin R. Ellison, board chair and chief executive, almost certainly knew about this when he was on the earnings call.

According to J.C. Penney:

Ellison has notified the Company of his decision to resign from his role to pursue another opportunity with Lowe’s Companies, Inc. While Ellison will remain a director and CEO through June 1, he will step down from his position as chairman of the board effective immediately. The board of directors has elected current Lead Independent Director Ronald W. Tysoe as Chairman of the Board and has created an Office of the CEO, which will be comprised of Chief Financial Officer Jeff Davis, Chief Customer Officer Joe McFarland, Chief Information Officer and Chief Digital Officer Therace Risch and Executive Vice President of Supply Chain Mike Robbins. These four leaders will share equal responsibility for the Company’s day-to-day operations until a new CEO is appointed. A search committee has been formed to conduct a search for a chief executive officer at JCPenney.

Poor results pushed the stock down last week:

Adjusted net loss was $69 million, or ($0.22) per share, for the first quarter this year compared to adjusted net income of $2 million, or $0.01 per share, for the first quarter last year. Adjusted net loss/income for the first quarter of 2018 and 2017 included the sale of operating assets, which totaled $17 million, or $0.05 per share, and $117 million, or $0.38 per share, respectively.

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Its forecast was even worse:

The Company has revised its 2018 full year guidance, which reflects only the impact of the adoption of new revenue recognition and pension accounting standards, as follows:

Comparable store sales: expected to remain at 0.0 % to 2.0 %; and
Adjusted earnings per share: now expected to be ($0.07) to $0.13.

The departure means that a new CEO may have to set a new course for J.C. Penney to survive.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.