Much of the difference in the size of the actual loss from the earlier estimate is due to an impairment charge on the value of JCPenney’s business. The good news for JCPenney is that taking such a charge won’t cost it any cash at the time it needs to conserve as much as possible. The bad news is the business itself, such as the value of its name, isn’t worth as much, and that could limit its ability to raise the additional cash it needs.
JCPenney’s net loss in the quarter came to $546 million, up more than 250% from the year-earlier loss. Revenue fell 53%, roughly in line with its earlier forecast.
As stores started reopening their doors, the losses continued to mount. On Friday JCPenney reported preliminary results for the month ending June 6 included an operating loss of another $60 million.
JCPenney was regularly losing money before the Covid-19 pandemic. The company’s most recent profitable year was 2010, and its net losses have totaled $4.5 billion since then.
Since the summer of 2011, it has reported a net profit in only five quarters, all of them in the holiday shopping season. The company has been unable to make money without that boost in sales.