Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

J.C. Penney Company, Inc. (NYSE:JCP)

Q2 2013 Earnings Conference Call

August 20, 2013 08:30 AM ET

Executives

Mike Ullman - CEO

Ken Hannah - EVP, CFO

Kristin Hays - SVP, Investor Relations

Analysts

Charles Grom - Sterne Agee

Matthew Boss - JPMorgan

Mary Gilbert - Imperial Capital

Dana Telsey – Telsey Advisory Group

Lorraine Hutchinson – Bank of America Merrill Lynch

Bernard Sosnick – Gilford Securities, Inc.

Deborah Weinswig - Citigroup

Will Frohnhoefer - BTIG

Michael Exstein - Credit Suisse

David J. Glick - Buckingham Research Group, Inc.

Operator

Good day ladies and gentlemen and welcome to the Quarter Two 2013 J. C. Penney Company, Inc. Earnings Conference Call. My name is Sue and I will be your operator for today. At this time all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions) As a reminder this call is being recorded for replay purposes.

And now I’d like to hand the call over to Ms. Kristin Hays. Please proceed.

Kristin Hays

Thank you, Sue. As a reminder the presentation this morning includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect the Company's current view of future events and financial performance. The words expect, plan, anticipate, believe and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the Company's future results of operations could differ materially from historical results or current expectations. For more details on these risks, please refer to the Company’s form 10-K and other SEC filings.

Also please note that no portion of this presentation may be rebroadcast in any form without the prior written consent of J. C. Penney. For those listening after August 20, 2013 please note that this presentation will not be updated and it is possible that the information discussed will no longer be current.

With that, I'll now turn the call over to our CEO, Mike Ullman.

Mike Ullman

Good morning and thank you for joining us. I’ve been looking forward to be able to speak with you about the Company and how we're progressing on the journey to restore growth and return to profitability.

Before I address the specifics, there is an obvious question about what do we stand for. What’s our unique position in the marketplace, and how do we successfully compete, especially when we do it well?

You may remember in 2011 JCP did – J. C. Penney did business at least once with over 50% of the families in America. We enjoy a 111 year old tradition of being a trusted destination for high quality goods at prices affordable for the hardworking American family. The friendly smile and the golden rule approach to taking care of customers has served for generations under one flag, J. C. Penney.

While the business climate today is very different and more competitive than it’s ever been, the values and principles of our business have not changed. Our business is built around having strong private brand merchandise, high-quality, relevant style at compelling prices.

Brands like Arizona, Worthington, Stafford, St. John's Bay and Xersion have been the core of J. C. Penney’s assortments and a reason for frequent business to stores and online. Many customers believe these proprietary and exclusive brands are actually national brands.

We are also proud to have most desired national brand partners and compete head to head for the best assortments and presentations. Our most prominent partners include Levi’s, Nike, Van Heusen, Carter’s, Vanity Fair, Dockers and many others.

Beginning about eight years ago we started adding exclusive attractions to our stores and .com. Customers tell us they enjoyed shopping, where there is always something new, some excitement, with Sephora, the world’s leading beauty destination now in 446 of our stores; Liz Claiborne, most popular women's apparel brand, Claiborne & Men’s; Mango, the only fast fashion brand in the U.S. department store, Modern Bride and Jewelry, Royal Velvet in Home, Joe Fresh, Jonathan Adler and many more. There is always something to discover. These attractions build visits and loyalty and they’re only found at this department store.

Our biggest attraction of all however is our staff. With award winning customer service, our people are eager to welcome customers and respect their desire to take care of their families by finding what they want and need while feeling appreciated while they shop with us. Thousands of customers have told us they’re excited that J. C. Penney they love and appreciate is back. They make it clear they want to see us as leader again in their community.

It’s with these tenets in mind, that our team is enthusiastic about having the unique opportunity to restore a great American icon to its rightful place. With this important context, let me now share an overview of the quarter.

We like to tell you where the business is today and our plans as we approach the back half of the year. After that I'll turn the call over to Ken Hannah, our CFO, who'll walk through our financials in more detail. Following that we look forward to taking your questions.

Over the last four months or so, since I returned to the Company, we have been focused on moving as quickly as possible to stabilize the business not just financially, which we’ve made a meaningful progress on, but also operationally including merchandising, marketing, store experience, jcp.com as well as the leadership team. Like the rest of the retail industry, we’re facing the headwinds of declining mall traffic, and a difficult retail environment; these are factors we cannot control. However, the key to our turnaround is addressing the number of operational issues that we can control.

To summarize where the Company is today, we know where the problems are. We know how to address them, and we have the right plans in place to do the job successfully and get back on a path to return to profitable growth.

It's no secret that the Company’s prior merchandising and promotional strategies weren’t working. We had to make changes. But these changes take time and they have financial implications whether in the form of additional markdowns, investments in additional inventory, or investing in additional staff store hours; we had to get back by listening and putting the customer first.

As you can see on our results for the quarter, we aren’t where we need to be yet. This is however a journey. There are no quick fixes to correct the errors of the past. It's going to take time to get fully back on the right track across the Company. Our top priority in the second quarter has been to improve traffic and purchase conversion by reconnecting with our customer who frankly had lost faith in us. Bringing back promotions was a critical first step. It's taken time to find the right messaging and promotional cadence, but the response to our back-to-school marketing messaging which we launched late in the period has been promising.

And while it's still early in the season, we have seen encouraging signs especially during the tax-free weekends and promotional weekend periods. We also started to get our merchandise assortments and in-stocks back to where they need to be, beyond just for back-to-school.

As I told you in May, coming into the second quarter, we're going to be out of stock in key basic items for our customers which they trust us to have when they came to J. C. Penney. We spent the last three months getting back in stock and what customers need, and we fully expect to be in great shape by the fourth quarter.

We also made progress during the quarter getting back into the right balance of private, national and exclusive brands and attractions, a key differentiator for J. C. Penney. Importantly, St. John's Bay for women has been flowing into our stores, there is still about half the inventory that we’ll need to fulfill customer demand. As with all our key item basics, we expect to be back in stock in St. John's Bay in the third quarter.

Arizona is another important brand, private brand for us. The team started working last year to improve the style and fit of our Arizona assortments and increase our inventory levels in time for back-to-school this year. And based on what we see in the shopping period to-date it's working. Our private brand penetration is central to restoring ourselves to historical gross margins and we believe this can be done during our turnaround.

Having partners like Nike, Levi’s and Carter’s speaks to one of the historic strengths of J. C. Penney, our supplier relationships remain as strong as ever. Despite what may have been erroneously reported last month, our shipments have been and we will continue to flow. We will be in stock and ready for business in stores and on jcp.com.

We're very grateful for the support of our key vendors and have shown us through this period and we had very successful meetings with them in our recent domestic supplier summit with 500 suppliers in Plano and our international supplier summit with 500 suppliers in Hong Kong.

We obviously shared with them a significant financial support we arranged with Goldman Sachs which we had put in place in order to make sure that we had sufficient liquidity to effectuate the turnaround. And as mentioned in our press release, we expect to have 1.5 billion of available liquidity at year end.

Finally, our exclusive attractions like Sephora inside JCPenney and Liz Claiborne continued to outperform. We will have 30 new Sephora stores in the second half bringing our total to 446 locations.

Now let me turn to our stores, as we approach Back to School we made some critical fixes to our in-store experience and direct response to the customer associate feedback and to move back towards industry-leading service our customers expect from us. For example, our associates in the stores are now easy to identify with Red J. C. Penney lanyards, name badges and branded cross body pouches that carry their mobile POS devices and more so customers can easily find them throughout the store.

We also improved the checkout experience by deploying 2,800 mobile carts in many of our stores in time for Back to School and we are adding back 1,400 permanent cash registers, altogether we have several thousand more places to check out this year than last. And of course we are offering a range of special Back to School promotions which is helping us drive traffic to our stores in jcpenney.com.

While it's still early in Back to School shopping period, I won't go into the details, the very early customer response to our marketing including our viral "First Day Look" campaign as well as our trusted assortment of Arizona, Total Girl, Exertion have beaten expectations. On the national brand front Nike, Levi’s and Vans performed very well for us. In general our performance is beginning to reflect that we have the brands and styles and sizes mom and teens are looking for at the price they find right.

Of course having the right merchandize doesn't matter if we're not telling our customers about it in the right way. While our apology ad in early May was appreciated by customers, we have work to do to rebuild the customers' trust and loyalty that was impacted by the mistakes of the past. And while we got a late start in the Back to School marketing, the campaign is now very competitive and resonating with our core customer.

We expect our marketing will improve substantially going forward. Debra Berman, our marketing and brand strategist just joined us in early August. She's off to a running start. Her team and merchandizing teams will be working closely together and you will see the results of this in time for this all important holiday season.

Another critical project for us is our home departments which still reflect the strategy of the company's previous management. Our underperformance in this area has been a major obstacle in the turnaround effort so we are making substantial changes to improve performance. As you know, previous management invested heavily in a new home store strategy. Construction was delayed from May to mid-June and there's still 30 stores out of 505 yet to open.

When it was unveiled, it became clear that merchandizing strategy was not resonating well with our core customer and performance has been weaker than we had hoped. In fact if you take this quarter's home performance out of the equation, our comparable store sales for the second quarter would have been 240 basis points better. We have work to do to fix the home store but I know we can get it done.

I'd especially like to thank Liz Sweney who heads merchandizing for us for agreeing to take on the home business directly. It is going to benefit from her energy, passion and her talent and the strength of her contribution is already evident as is her team’s.

Let me now move to jcp.com. Over the last year this business has been operating almost completely independently from our stores both on inventory and marketing basis, but under the leadership of a new team we are actively aligning these parts of our business to restore congruency between store and online merchandizing assortments. We have re-integrated store and online buying, planning and allocation and improved our merchandize assortment and in-stock levels across sizes and styles, and we have reconfigured many of the user interfaces to make it easier to shop.

The initial results for jcp.com have been very positive though not yet where we want them to be. Though our online sales for the second quarter were down 2.2% they improved sequentially by 1,700 basis points. In fact, we saw sequential improvement in every division online. For the month of July alone, dotcom sales were up over 14%. Back to School traffic online was also encouraging with good performances from private brands like Arizona and national brands such as Levi’s and Nike.

Another critical priority for us in the quarter was to strengthen our leadership in the home office. I was quite encouraged when I returned as the 24-person executive Board, one-third of executive Board team had been at J. C. Penney intact when I left. Another third had been promoted to that level during my time away and another third, the last third, were new talent to J. C. Penney. This is a great balance for our team. Over the next several seasons, we will build our bench strength and retain and attract talent to fill key roles in the future.

So with all that said, let me give you some key metrics for the quarter. Sales as I said were not where they need to be. For the quarter, our comps were down 11.9% year-over-year but that marks a 470 basis point improvement from the last quarter and sales improved sequentially by a month within the second quarter, a trend the company expects to continue in the back half.

Our store traffic was down compared to the first quarter and down year-over-year which isn't surprising in light of the challenging mall traffic trends across the industry. Purchase conversion was down slightly but it did improve throughout the quarter as we improved our pricing and signing changes and started to take hold.

Ken will go into the details but the margins were impacted during the quarter by heavier clearance levels including merchandize carried over from the first part of the year and lower than expected sales. Now with respect to SG&A, the strategic investments we are making to drive traffic led to a small increase due to the planned increases in marketing and store selling hours to support Back to School.

I should also mention we had a charge in the quarter of $0.99 per share related to the accounting treatment for our net operating losses which decreased our EPS on a GAAP basis. Ken will discuss this in more detail, but let me reiterate that this is [not] [ph] an accounting driven charge.

I would like to give you an update on a few things we are seeing three weeks in the Back to School shopping season before turning over to the outlook for the remainder of the year. First, our key private brands like Arizona, Total Girl and sought after national brands like Nike, Levi’s and Vans are strong performers so far this season. We're also quite encouraged by the near performance of denim, athletic shoes and our school uniform shop both in stores and online.

Traffic remains a bit challenging in August but this is not surprising to us since last year our only promotion during this time was free haircuts for kids. Last year we gave away 1.6 million free haircuts in August averaging 53,000 per day. While the customer was in the store, they also shopped, so we're up against those numbers this season. We've been listening to our customer and ready to take what we've learned and put it to good use for the holiday season.

So looking into the second half of the year, our focus is going to continue to drive traffic conversion with occasion-specific promotions and the right merchandize. First, we're going to continue to improve our assortments with better balance of private and national brands and exclusive brands. In kids, the Disney shops will open inside J. C. Penney in early October.

There will be visual and product changes in men's in the same period with important improvements in strong selling Dockers and Hagger brands. In addition to St. John's Bay where we're gaining strength across several of our long sought after private brands including JCP home, Cooks and Ambrielle.

Second, we are as I mentioned working quickly and forcefully to strengthen our marketing and messaging to restore customer loyalty and excitement. This includes positioning J. C. Penney as a primary destination for Black Friday and Cyber Monday and to sustain momentum throughout the holidays. We're also bringing back our tiered J. C. Penney rewards program, in order to build customer loyalty and regain the attraction that had been lost when the company discontinued the successful sales driver.

In our stores, we are working on a number of fronts including finalizing our resigning efforts to enhance clarity and emphasize the strength of our merchandize assortments and the affordability families depend on from J. C. Penney. Second, ensuring the store's staffing levels meet the customer traffic and third, continuing to strengthen our customer service.

As we do all this, I'd like to express my deepest thanks to our associates in the home office and in each and every one of our stores. As we rebuild the business, we are taking important steps to rebuild morale and drive excitement about the future. We recognize how hard our associates have been working to support the changes we are making and they are very eager as we are to restore profitable growth.

Taken together our objectives moving forward are clear. We're focusing our efforts on regaining customer loyalty by offering entrusted brands, award winning service and the affordability the America's families can depend on. We've made meaningful progress in stabilizing our finances and our operations and we have the right people taking the right actions to achieve our goals.

Now, I'd like to turn it over to Ken, who will take you through the details of our results for the period.

Ken Hannah

Thank you, Mike, and good morning, everyone. Welcome to our second quarter 2013 financial report. As Mike mentioned, there's a lot going on in the quarter. Our results reflect the progress we are making on our journey to fix the problems we face and stabilize the business. I will ask for your patience as we try to clearly articulate the operating and non-operating impacts on the business during the quarter. With that let’s walk through the results.

Total sales for the quarter decreased 11.9% to $2,663 million compared to $3,022 million in the same quarter last year. Comparable store sales decreased 11.9% as well. Sales in the quarter continued to be negatively impacted by our failed prior merchandizing and promotional strategies, while we aren’t satisfied with being down 11.9% this represents an almost 500 basis points sequential improvement versus the first quarter and as our stabilization efforts began to take effect our comp sales improved each month during the quarter a trend that we expect to continue.

The lengthy renovation, delayed opening and disappointing remerchandising of our home departments adversely impacted comparable store sales, overall the performance of the Company’s home division had a 240 basis point impact on its comparable store sales results for the quarter. Online sale’s through jcp.com was a particular bright spot this quarter contributing $215 million in sales. While the online sales were down 2.2% from the same period last year the online sales trend improved almost 1800 basis points sequentially over the first quarter and throughout the quarter with the month of July up over 14% to last year.

Now turning back to stores. Our traffic trends are improving sequentially but we’re still down 5.5% overall for the quarter when compared to the same quarter last year. Store conversion for the quarter was down 4.9% to last year. The stores that were not under construction for a lengthy home renovation experienced conversion that was flat year-over-year, like traffic we’re encouraged by the trends we’re seeing in conversion. We’re focused on listening to our customer and continuing to improve our marketing in order to drive traffic and conversion in the second half of this year, and as you heard from Mike we’re pleased with the response to our back to school marketing and messaging.

Our gross margin for the quarter was 29.6% compared to 33.2% in the second quarter last year. The 360 basis point reduction year-over-year was driven by unusually high markdowns and clearance merchandise sales, lower than expected sales in general and a return to promotional activities including coupons and sales events as we return to a more competitive promotional pricing model. As Mike mentioned we’ve made steady progress on achieving the right mix of private, national and exclusive brands which would help us improve our margin going forward.

Our SG&A was $1,026 million in the second quarter, that’s down $24 million from the same period last year, and includes plant increases in marketing to restore traffic levels and store labor to improve conversion. Despite these planned investments the teams have done a great job reducing expenses throughout the business, with net SG&A savings of $709 million over the last six quarters. As I mentioned we did reinvest in customer facing activities such as marketing and in-store labor this quarter which we believe will enable us to reestablish a meaningful and enduring connection with our customers. This isn’t just about having more associates on the floor but also making them more recognizable to our customer.

Continuing with operating expenses, primary pension expense was $25 million in the quarter down from $48 million last year reflecting the actions taken last year resulting in lower service costs due to the fewer participants in the plan as well as an improved return on planned assets in 2012. Our pension plan remains fully funded.

Real estate and other was an income of $68 million in the quarter reflecting a net gain on the sale of a partnership interest. Depreciation and amortization expense was $143 million in the quarter up $15 million from the second quarter a year ago. The increase is primarily the result of the depreciation from investments we’ve made in our existing stores in the last year.

We incurred $47 million in restructuring charges during the quarter, $24 million of which was related to stores fixtures including increased depreciation for fixtures being replaced in the home department and other fixture write-offs, another $4 million associated with reductions in home office and stores, $13 million in management transition expense in the quarter and $6 million of other costs.

During the quarter, the Company enhanced its liquidity through the issuance of $2.25 billion senior secured term loan facility. We are very pleased with the demand for this facility in the market and our ability to upsize. Associated with raising this term loan the Company paid $355 million to complete a cash tender to repurchase its 7 1/8% debentures due in 2023.

In doing so, the Company recognized a loss on extinguishment of debt of $114 million, reducing earnings per share by $0.52 in the quarter. There is no meaningful expense associated with this extinguishment going forward.

The financial actions we took in the quarter enabled us to stabilize the business financially and provide us with the necessary resources to complete the turnaround. Given the Company's current cash position, along with the undrawn portion of our credit facility, we expect to end the year with an excess of $1.5 billion in liquidity.

You may have noticed that our effective tax rate for the quarter looks extremely low, reflecting an effective tax rate of 3% compared to 36.4% in the previous quarter. The lower tax rate and lower associated benefit is primarily driven by a charge of $218 million to record an increase to the tax valuation allowance for the deferred tax assets. This increase in the tax valuation allowance negatively impacted the results in the quarter by approximately $0.99 per share. We currently expect our effective tax rate to be near zero for the remainder of 2013.

Our reported earnings per share is a loss of $2.66 for the quarter. Adjusted for the charges we took in the quarter for restructuring, the net gain on the sale of a non-operating asset, the extinguishment of debt, and adding back the pension expense, the adjusted earnings per share is a loss of $2.16 per share. The $2.16 loss per share includes the $0.99 impact associated with the tax valuation allowance.

Cash and cash equivalents in the quarter – second quarter of 2013 were $1.535 billion, an increase of $714 million from the end of the first quarter of 2013. Our merchandise inventory is $3.155 billion. We invested $357 million in inventory this quarter as we address the challenges we faced with respect to inventory in key basic items and private brands.

Significant progress has been made and we’re confident we’ll have inventory at appropriate levels throughout the store and online well in advance of the holiday season. As Mike stated, these improvements are only possible through the continued support from all of our suppliers and partners. In fact, many of our key supplier partners have mentioned the strong performance they are seeing in their business with us and we're proud to have their partnership and support.

Our property and equipment is $5.822 billion, up from $5.153 billion in the second quarter a year-ago. This increase is primarily associated with the capital investments we’ve been making in our existing stores. Our supplier payables at quarter end were $1.276 billion, up $261 million from the second quarter last year. This is consistent with the level of inventory receipts in the quarter.

Short-term borrowings remained at $850 million based on the previous drawdown of our revolving credit facility earlier this year. Our other accounts payable and accrued expenses were up $127 million from the same quarter a year-ago, reflecting an increase in accrued and unpaid capital expenditures of $156 million primarily associated with our investment in home. The accrued and unpaid capital expenditures are expected to be paid in the normal course of the business in the third quarter.

Our long-term debt is up $1.98 billion this quarter due to the issuance of the $2.25 billion senior secured term loan facility offset by the repurchase of our 2023 debt securities with the principal amount of $245 million. Our total net deferred tax assets and liabilities are down $370 million as compared to the same quarter a year-ago, due primarily to an increase in the deferred tax assets for net operating loss carry forward net of valuation allowances.

Our operating cash flow is a use of $708 million in the quarter. It's important to point out that this reflects the planned increase of $357 million in inventory, which includes restocking of basics and private branded categories identified as a key part of our stabilization plan.

Our capital expenditures are 439 million in the quarter or higher than normal reflecting the planned investment in our home stores. As mentioned earlier, there was an additional $156 million accrued and unpaid associated with home that will be paid in the normal course of business and reflected in the capital expenditures in the third quarter.

Excluding the home capital expenditures that will be paid in the third quarter, we expect our capital expenditures to return to much lower levels reflecting investments in Sephora inside JCPenney, information technology and maintenance in our stores and distribution facilities.

As we indicated in the release, we expect capital expenditures next year to be approximately $300 million. Our financing cash flow was a source of $1.8 billion in the quarter reflecting the consummation of the $2.25 billion senior secured term loan facility and the completion of the cash tender for the outstanding 7 1/8% debentures due in 2023 for $355 million.

Our cash balance of $1.535 billion and the unused portion of our credit facility provide the company liquidity of $1.85 billion. The total liquidity available to the company is expected to be in excess of $1.5 billion at year end given the improvements we're experiencing in the business.

With that, I'll turn it back over to Mike.

Mike Ullman

Thank you, Ken. We're ready to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Charles Grom of Sterne Agee. Please proceed.

Charles Grom - Sterne Agee

Thanks. Good morning, Mike. Good morning, Ken. Mike, I was hoping you could address the management infrastructure that you have around you, where are the holes and when do you expect to make those additions to the team?

Mike Ullman

We have an executive Board. At this point I believe we have 22 on the executive Board. We have an interim CIO which I expect that position to be filled before this fall. We have an interim person in the property development category. The rest are fully employed and very capable and we feel very strongly that we have the team to effectuate the turnaround.

Charles Grom - Sterne Agee

Great. And then you talked about the comp trend there in the quarter getting better. I was wondering if you could break that out apparel versus home for us.

Mike Ullman

Well clearly the apparel is much stronger than home. Home struggled. We expected home to improve obviously when the new store shops that opened and quite the opposite happened. We actually have less productivity in the new home stores than we do in the stores that didn't get a home store, so, a merchandizing challenge to say the least. Women's apparel is actually strengthening coming into fall season so that’s - since it’s our largest category we feel quite positive about shoes and women's apparel at this point.

Charles Grom - Sterne Agee

Okay, great. And then for Ken, with regards to your expectations to end the year with I think you said 1.5 billion in cash liquidity, could you help us out with a few of the buckets to get there in terms of where you expect inventory levels to finish [based on] [ph] 1.2, any further increase in your expectations for an increase to the valuation for your DTA, I think you said 0% tax rate for the back half? And then what your overall working capital expectations are going to be just to help us get to that 1.5?

Ken Hannah

Yeah, sure. So let’s start with the tax valuation allowance, there's no economic impact associated with that. As Mike mentioned that's accounting. So as our deferred tax assets that include our net operating loss carry forwards have exceeded our deferred tax liabilities, we put up the valuation allowance. And so as we would continue to generate losses, we would continue to provide for that. As the company returns to profitability, we would expect those deferred tax valuation allowances to reverse and come back through income. So there's no impact on liquidity that's associated with that. And that was about a $0.99 impact in the quarter. From a working capital standpoint, as most retailers we do plan to continue to invest in working capital in the third quarter in advance of the holiday and then you see that all come back in the fourth quarter in terms of inflow of cash and then an actual net inflow from a working capital standpoint. And so we really don't have anything that's all that unusual. We're not assuming that we see some huge trend change in the business. I think when we look at what we're seeing right now over the last several months and the improvements that we've experienced and then what we're seeing early here in August, I think we're very comfortable that the $1.5 billion liquidity is in line for year end.

Charles Grom - Sterne Agee

Could you just touch on inventory for us?

Ken Hannah

Yeah, I mean inventory we expect to see that go up a little bit in Q3 and then that would reverse back in Q4. So overall I think you'll see inventory levels by the end of the year that are down from where they are today.

Charles Grom - Sterne Agee

Okay, great. Best of luck.

Ken Hannah

Thanks.

Operator

Your next question comes from the line of Matthew Boss of JPMorgan. Please proceed.

Matthew Boss - JPMorgan

Hi. Good morning. So online improvement in the quarter was pretty significant. Mike, in your experience, do you think this represents a forward indicator for aggregate sales and with the comments around Back to School improvement, is positive same-store sales in 3Q, is that the expectation?

Mike Ullman

Well, obviously, dot-com's a big opportunity for us. We dropped about $0.5 billion in Internet sales last year by disconnecting the merchandize assortments from the online assortments, so the fact that they were not congruent made it very difficult for store associates to access online to get additional merchandize for their customer or to put that on order. By reconnecting and realigning the merchandize assortments, the business popped almost immediately. We expect it to get progressively better. We're encouraged by the trend and each week we're seeing more store referrals to the Internet, so that's what gives us the confidence. We most recently were just cited in a Wall Street Journal study I believe it was, we had the second best Back to School online business behind Walmart that tells us we're back in the game and we expect to be in the game all the way through the rest of the year. What was the other part of your question?

Matthew Boss - JPMorgan

The forward indicator for total sales and is positive same-store sales in 3Q, is that the expectation?

Mike Ullman

Well, it would be my expectation we’d come out of third quarter on that kind of a trend but we still have a lot of work to do to work through. Essentially as you well know if you put things in the store that customer doesn’t react to in one quarter, it tends to be liquidated in the next quarter. We still had some residual liquidation coming out of the second quarter of inventories that were bought for the previous management team for a different concept and we're working our way through that. I would also note that our August performance has not only been impacted by the difference in traffic due to free haircuts, we also had significant clearance a year ago in terms of number of units that were flushed through the system in August which added sales but frankly more or less very difficult on profitability. So we're up against that in August as well as haircut traffic.

Matthew Boss - JPMorgan

Great. And then Ken, could you help us walk us through the bridge between the total available liquidity of 1.85 billion and the ending cash balance of 1.5, I think specifically I'm interested in the letters of credit versus 1Q. And then finally looking forward, do you guys think that the company would need any outside liquidity injections going forward or are you good with what you have longer term?

Ken Hannah

Yeah, so the difference between the cash and liquidity is simply the unused portion of our credit facility and that does not include any – it takes into consideration the current outstanding letters of credit in any anticipated increases. So that's what the difference is.

Matthew Boss - JPMorgan

And then looking forward, do you think you'd need any additional outside liquidity?

Ken Hannah

Certainly as we look through the end of the year, the $1.5 billion of liquidity that we have projected we're not assuming that we need any additional financing.

Matthew Boss - JPMorgan

Okay, thanks. Good luck.

Operator

Your next question comes from the line of Mary Gilbert of Imperial Capital. Please proceed.

Mary Gilbert - Imperial Capital

Yes, good morning. I just wanted to follow-up on that last question. How much did you have outstanding in LCs at the end of Q2?

Ken Hannah

Just under $500 million; it's like $480 million or $490 million of LCs. There hasn’t been a huge change in the last quarter there.

Mary Gilbert - Imperial Capital

Okay and how much of it is used for workman's comp and how much is associated with inventory initiative?

Ken Hannah

We have not broken that out in the past, but the majority of it is tied to things like worker’s comp, it's the majority is for things like that not for working capital.

Mary Gilbert - Imperial Capital

Okay, great, that’s helpful. And then just to clarify for the year and I know you talked about the accounting of tax, but on a cash tax basis, what should we assume for the year, would there be any cash taxes?

Ken Hannah

No, we’re not anticipating any cash taxes.

Mary Gilbert - Imperial Capital

At all this year, okay great. And then what about as we look out to 2014?

Ken Hannah

We haven't provided projections for cash tax rates for 2014.

Mary Gilbert - Imperial Capital

Okay, and then CapEx, for the balance of the year would that be less than $100 million going forward?

Ken Hannah

We had put out before that we thought the CapEx for the year would be approximately $1 billion and you could see what we actually expended in Q2, and then we’ve broken out for the most part what the balance is and there’s 150 some odd million dollars of that that’s accrued and unpaid that will be paid in the normal course in Q3 associated with home.

Mary Gilbert - Imperial Capital

Okay, that’s helpful, great. And then I wondered if you could give us any color on the comp sales trend, let's say as we get towards the back half of Q3 because obviously you gave us some good color on August, how should we look at September and October especially since comps overall for the quarter last year were down 26%?

Mike Ullman

I’ll take that, essentially what I mentioned in my remarks is we had to restart basics and sizes and that inventory in that is now in our assortments so that’s encouraging to us. We also have an important imperative to get the percentage of private brand merchandize back up to over 50%, our assortments that significantly impacted profitability as well as the attraction for our core customer when she comes two or three times and doesn’t find St. John's Bay, it was a $1 billion brand that was just eliminated completely from our assortments in women’s. We expect that to start to contribute to comp store growth. Obviously, we’re very focused on the holiday quarter because it's the largest as I mentioned in my remarks Black Friday, Cyber Monday and the cadence of promotion back through the holiday. We certainly expect to hold ourselves accountable for growth.

Mary Gilbert - Imperial Capital

Perfect, great. Thank you very much.

Operator

Your next question comes from the line of Dana Telsey of Telsey Advisory Group. Please proceed.

Dana Telsey – Telsey Advisory Group

Good morning everyone. Can you talk a little bit about the gross margin and the changes that you’re making in merchandizing with the gross margin sub 30%, where do you see it getting back to, how do you see that working out given the promotional strategy in place. How does it work by category and just timing? Thank you.

Ken Hannah

Well our gross profit over the last 10, 11 years, all except one year has been in the 37% gross profit rate. So those are our historical margin levels. We see no reason why we can’t return to historical margins. But what's weighing on the margins today is the disposition of merchandize the customer didn’t relate to and that should subside during the third quarter. And as I said the combination of restoring the percentage of private brand merchandize, editing out things that have not resonated particularly some issues in home that we have to deal with. We expect the fourth quarter we should start to see more constructive margins.

Dana Telsey – Telsey Advisory Group

Thank you.

Operator

Thank you. Your next question comes from the line of Lorraine Hutchinson of Bank of America. Please proceed.

Lorraine Hutchinson – Bank of America Merrill Lynch

Thank you, good morning.

Mike Ullman

Good morning.

Lorraine Hutchinson – Bank of America Merrill Lynch

On the SG&A for the back half, should we expect further incremental investments in your in-store presentation or anything – or marketing, any other buckets?

Mike Ullman

We’re certainly going to invest in marketing. A year ago we didn’t really have the same promotional cadence and we think it's very important that in a promotional department store that you’re able to compete head to head with the choice that the customer has. So we have invested in the back half incremental market. I don’t see big expensive incremental changes in other expenses, at this point we’ve restored certain amount of staffing in stores for peak selling periods, that’s just common sense that there’s customer in the store we need to take care of them.

As I mentioned in my remarks we have returned over 100 cash registers to help people and the number of carts the mobile carts for the portable devices. So I think we’ve made the investments to get back in business. I don’t really see a big ramp up. The good news on home most of the fixes there did not involve additional capital or expense, its merchandizing lapses and frankly a mix of merchandize pre-modern and traditional which is out of line. And some space issues in terms of allocation of space for some key categories, but there are about 10 things in home we see as opportunities, in addition of being problems, they’re opportunities.

Lorraine Hutchinson – Bank of America Merrill Lynch

Thank you. And then when we think about next year’s CapEx forecast of $300 million, should we assume that that’s all maintenance and won't include any new shops or attractions?

Mike Ullman

There are no major attractions in that plan. I will continue to open some more stores as we have because those are the most productive things we have and now we have 446 stores we expect to keep progressing through the major store footprint.

Lorraine Hutchinson – Bank of America Merrill Lynch

Thank you.

Operator

Your next question comes from the line of Bernard Sosnick of Gilford Securities. Please proceed.

Bernard Sosnick – Gilford Securities, Inc.

Good morning.

Mike Ullman

Good morning.

Bernard Sosnick – Gilford Securities, Inc.

With regard to store traffic, you’ve begun to offer coupons, became promotional with the apology and Mothers Day was apparently strong business for you; assuming the traffic improved at that point where was the traffic weakest, did you see benefits during key holiday events like Fathers Day, Memorial Day, Independence Day or were those still disappointing?

Mike Ullman

I think keep in mind Bernard we’re tracking traffic against the last year which was a different business strategy, so it's a little hard to track day-by-day, week-by-week what the traffic should be given the fact we had clearance Fridays, last year we had – we dumped a lot of inventory out the door in August last year. We’re up against that clearance, clearance was almost 35% of the sales in the month of August last year and it's much less than that this year obviously because we’re in better shape.

Our clearance percentage will actually improve sequentially as we work our way through the old inventory. We think traffic is a function of people reengaging with the company. We told a lot of customers that we don’t really have what they what. So since we get let’s say approximately six visits per year, it takes a while for the customer to come back and see that we’re back in stock in sizes and basics and the brands that they want. So we’re not overly concerned about traffic, we think it's a combination of messaging that’s relevant, that speaks to her about what she needs.

We tend to be the lowest priced anchor in the mall. I don’t think they necessarily have found what they wanted other places in the mall, as a matter of fact some of the studies showed that they actually loved the mall to find the price points they could afford. So we think we have a compelling attraction. We have a damaged and impaired business that we’re turning around. So, traffic will resume when we have all the right reasons for her to come.

Bernard Sosnick – Gilford Securities, Inc.

You hired a new marketing executive and you offered encouragement about prospects for the holiday season with regard to marketing. What do you see the thrust of marketing to be as compared with the promotional tempo that Penney has always maintained?

Mike Ullman

It's our view that most department stores 90% of what they message is promotion and a cadence of activities and attractions and the convergence of the occasions and brands. We felt that very important to resonate with our customer on de-promotional level which we really regard more as marketing strategy and messaging. We also feel we’re underdeveloped in social and digital connection with the customer and that’s also a piece of marketing. So Debra Berman is a very experienced strategist, has worked at three different agencies primarily in planning and strategy. She's not the person in charge of creative. She's in charge of how do we resonate and get our message deep down into our brand heritage. We also have a number of iconic private brands that we can afford to invest in to make sure that she understands those brands are also one of the reasons she comes to J. C. Penney. So I would say marketing's not a simple topic. It hasn't necessarily been well understood why we are going after a partnership between marketing and sales promotion, but we think it's very important.

Bernard Sosnick – Gilford Securities, Inc.

Just one more point. In August last year, you had the benefit of a lot of clearance as you said and the haircuts. But sales for Penney dropped off a cliff beginning around Labor Day, which I assume in part resulted from an absence of promotional activity on Labor Day, Columbus Day. Why wouldn't you be more encouraged about sales during September and October?

Mike Ullman

Well, I don't know that we're not encouraged. I think what we've said is that we have work to do to regain the trust of our customer. So we'll certainly take additional volume as they reward us. But to bet the ranch on some kind of wild return to growth and a specific short time period I think wouldn't be prudent. We have the inventory to do the business. I think if you come in our stores these days, they've never looked better. Some of the improvements during the previous management were in the area of visual clarity and visual presentation. So I think that people will give us the opportunity to show what we have. Now that we're in business in inventory, we would expect to do well. But it's a tough environment. I don't think I need to tell you that virtually every retailer that's dealing with consumer spending and particularly discretionary spending is competing against home improvement, handheld devices and new auto sales and so forth. So we'd be pleased to report at the end of the third quarter that we were wrong. We should have forecasted a higher comp sales volume.

Bernard Sosnick – Gilford Securities, Inc.

Okay, thank you very much.

Operator

Your next question comes from the line of Deborah Weinswig of Citi. Please proceed.

Deborah Weinswig - Citigroup

Thanks so much. Mike, you talked about the three tier loyalty program coming back, can you talk about how you're going to communicate that to customers and will that come back immediately or will that come back over the fall season?

Mike Ullman

Great question. We are reissuing all of our J. C. Penney credit cards during the month of October and that will be the time we'll also message the three tier program and I really can't explain why it had been dropped because customers really do respect the fact that they can earn a higher level of recognition by more loyal purchasing with us. We also know that when we issue credit cards, people tend to activate, so I think that will be incremental to our average credit card penetration of our own card as it flows out into the fourth quarter. So we're quite enthusiastic about that.

Deborah Weinswig - Citigroup

And then as you look at your product mix today, are you back to your national exclusive private label mix that you think your core customer is looking for?

Mike Ullman

Conception and strategically we're back there in our mind. St. John's Bay is still only about half of the inventory levels that we think are necessary. It's a straightforward answer that that customer really was very loyal to the classification goods in St. John's Bay. We introduced JCP women's during last year and some of the classification goods are being satisfied by JCP women's but to your core question, do we intend to get back to the mix that was so helpful in restoring our margins? Absolutely and I think that it will take probably the rest of the third quarter and a little bit into the fourth quarter to be fully satisfied that we're at the right percentage of private brand. Keep in mind, we don't talk about Liz Claiborne necessary as a private brand because it's truly in the mind of the customer a national brand that we do manufacture Liz Claiborne and design Liz Claiborne and it's very, very successful.

Deborah Weinswig - Citigroup

Okay. Then lastly there's a quote in the press release that said, in addition, several merchandising initiatives are underway to make the Home assortments more compelling to customers. So where along the timeline of underway are we?

Mike Ullman

Okay. Well, let me go through a couple of the impairments, okay, because I think it's important to understand – as I said, it's not a big capital issue or big expense issue, it's really merchandizing one-on-one. When a customer's lifestyle is traditional versus modern versus conservative, if you are out of line in terms the proportion of the merchandise in each of those categories, its little hard not to be facetious, but to spray the white furniture brown and call it traditional. So it's going to take longer to obviously get the merchandise mix by lifestyle, but that's a matter of purchase cycle. There is the issue is space allocation. Some of the most productive spaces in terms of profitability like luggage, frames, candles, window covering, these areas were diminished in terms of their size. We're going to reallocate space within the home department to address those issues.

Some of the shops are much more productive than others. So there will be some editing of shop allocation. The Main Street which was in some cases 18 feet wide, we're now looking at ways to better merchandise key items and attract to merchandise on the weekends in that space. The kitchen which was supposed to have candy and coffee and a number of different consumables, we're probably going to the merchandise that as a great cookware shop. So these things are not impossible, but they do take some time, and we’ve already reclassified all the soft goods, they get all the towels together, all the sheets together, all the pillows and pads together. That was quite difficult. It's been a packet.

If you want to give us credit for at least understanding the differences, our .com business in home is quite healthy, which says as long as you don't see the physical problems in the store, the customer reacted very well to the merchandise. So that gives us great confidence that we’re not totally adrift on the topic of home, we just have some structural and physical issues we have to overcome.

Deborah Weinswig - Citigroup

Great. Thanks so much for all the color. I appreciate it.

Operator

Your next question comes from the line of Will Frohnhoefer of BTIG. Please proceed.

Will Frohnhoefer - BTIG

Hello. Thanks were taking the call. Just a question around traffic in home, I think earlier on the call the reference had been to a traffic decline year-over-year 5.5% and also I think mention was made that traffic number still improved sequentially on a month-by-month basis within the quarter, and also with that home had a negative impact on traffic within the quarter or a less of a positive impact on traffic in the quarter than was anticipated. How do you kind of reconcile that? I mean, if home was really reintroduced in the second half of the quarter and if there is a sequential improvements in traffic and does not – I’m just trying to think of how the math works there and trying to get a better sense of the sequence?

Mike Ullman

Okay. Well, first of all, let’s talk about home. Home typically is a promotional category and something that drives traffic. In the case of the 500 stores that we opened in new home store, we actually lost traffic versus what the stores were getting that didn’t have the new store. So, we more or less told the customer that we didn’t have it the way they want to shop it and therefore we didn’t get the productivity and of course when they come two or three times, that’s difficult.

We also lost traffic in the month of May because we weren’t ready to open the stores on May 3rd as was scheduled. I got back on April 9th immediately ask where we were in the construction and found out that we were at least 30 days behind. So we lost all the traffic that would have been under home promotion in the month of May and probably cost us some business in the month of June as well.

So I think it’s wrong to assume the traffic kept progressively better through the quarter. Actually traffic continue to lag and as I mentioned, some of that was – we are up against huge dumping of promotional goods last year, clearance goods, as they try to clear the lack of sales in the first and second quarter in 2012. So home should be driving traffic. It’s typically not the most profitable part of the store, but does drive a lot of traffic. People like to shop home, they like to shop it promotionally and we made a lot of changes that so far we haven't been able to show the results because of the physical issues we have to deal with.

Will Frohnhoefer - BTIG

Okay. Fair enough. And then another thing you mentioned is that the original plan for home have been to arrange it more by brand and collection than by category and the category is more the direction you’re moving in and I’m wondering what impact also the price points of the original plan collections had on sales there during the quarter?

Mike Ullman

I think that's a fair point. I think that’s a fair way to be somewhat to be analytical or clinical, but looking at price points, the previous strategy really at the lethal, lot of the opening price points that many of our customer see is has reasons to come to J. C. Penney. So it’s a leading opening price points and focusing on better and best, while there is plenty of room for better and best in the assortment, it was the percentage of allocation by pricing zone. So we’ve started to reintroduce seven piece bedding sets, because that’s the customer that buys that, right. And to the extent we got a bit too pure as to the upscale nature of the home business, I think we drove away customers.

The other thing as we changed the allocation of hard versus soft in home, well maybe there was an imbalance and we needed a bigger percentage of hard in terms of floor care and so forth. We now have that but we went a bit too far. Hard home tends to be at lower margins than soft home, and we tend to be a destination for soft home. So, some of it is just more or less listen to the customer, we drove away a lot of our existing customers in the last year, so we want them to know we’re back in the business for things they expected to see in J. C. Penney. I mean one statistic that I am not sure is well known and that, we actually attracted fewer new customers in 2012 than any other previous 10 years. This part of the strategy was to attract new customer to J.C. Penney, but frankly the strategy was such that we actually lost more customers than we gained.

Will Frohnhoefer - BTIG

Well, thank you. That’s very helpful.

Operator

Your next question comes from the line of Michael Exstein of Credit Suisse. Please proceed.

Michael Exstein - Credit Suisse

Mike, thank you so much and it's great to talk to you again.

Mike Ullman

Thanks Michael.

Michael Exstein - Credit Suisse

A couple of quick questions for you. Can you give us an idea of whether there are any contingent liabilities in the prior administration sort of merchandizing initiatives and how those potentially might be worked off, number one. Number two, in terms of sort of the picturing particularly the stuff you talked about remerchandising the home, do you have to write off more of the fixtures, was that done in this quarter? And then finally maybe an update on IT, how much you’re going to do, are you going to pull back on that, where do you think you’re there?

Mike Ullman

Okay, in terms of the liabilities I think we’ve addressed in our view the issues. We have some, as I said tweaking to do in-home but we understand what they are, and they’re not material. And I would say in terms of fixtures we’ve addressed the fixture issues in the second quarter financials. We’re not carrying things into the third quarter that we could address when we see them. Your third question Michael.

Michael Exstein - Credit Suisse

IT. Update on what's going on with IT and whether you’ve scaled that back?

Mike Ullman

We were doing quite a lot in terms of pushing the envelope and what I would call the bleeding edge of technology. I think why that’s interesting, frankly we want to make sure we had the functionality to get through holiday and take care of customers, making sure our .com and website executed well and had the functionality competitive with our competitor set. So I think we are very well served by the leadership we have there in terms of our CTO and the CIO, Chief Digital Officer. I feel very comfortable with the staff we have and the capability we have. We’re well situated there. But I don’t think you’re going to see us as trying to invent new stores and new concepts. We have a turnaround underway and we’re very happy to have the technology to support it.

Michael Exstein - Credit Suisse

So – okay. So you stepped back from sort of the big re-do of the system that was contemplated a year ago?

Mike Ullman

Well, we have not stepped back from the enterprise software improvements, those modules have gone in and gone in well. We replaced our 40 year old general ledger for example in the quarter – last quarter, so we're making improvements that will help us run the business, but we’re not trying to win awards for the most exotic technology in a store.

Michael Exstein - Credit Suisse

Thanks so much, Mike.

Operator

Your next question comes from the line of David Glick of Buckingham Research. Please proceed.

David J. Glick - Buckingham Research Group, Inc.

Thank you, good morning. Two questions, one for Ken on SG&A and just a follow-up for Mike on home. Obviously, the sales and gross margin are more difficult to project but it does sound like you’re on improving trend line. I am just wondering if you can give us a little more visibility on the planned SG&A levels, are you still looking in that $4.2 billion to $4.3 billion level. And then for Mike on home, you referenced lead times obviously you’re doing a lot tactically to adjust on the run here in the fall in home but do you have a clean slate for spring of 2014, can you plan the right proportions of good, better, best, modern and traditional, hard versus soft, all those important issues. Can you really have a clean slate for spring of ’14 in home?

Ken Hannah

All right, I’ll take the SG&A question first David, then I’ll turn it back over to Mike. When we look at what we’ve been doing, we’ve been seeing the benefit of lot of the structural changes that were made. But we also recognize that in a period where we’re trying to win back customers, we need to make sure that we're appropriately investing on the marketing side to get the message out and then also when they come in, we want to make sure that we’ve got the associates there to take care of the customer. So, we are less focused right now on how do we reduce those two categories and more interested in how do we make sure we get the return on investment there. And so we're not giving up on the fact that we think there is opportunity, but when it comes to customer facing activities, that's an area right now as we try to regain our momentum and complete the turnaround, we feel it is necessary to invest.

David J. Glick - Buckingham Research Group, Inc.

So is it fair to say – I’m sorry, just a quick follow-up, is it fair to say you’re somewhere between the 4.5 you were at last year and the range that I quoted, I mean it wouldn’t be more than last year, will it?

Ken Hannah

I think if you look at the last two quarters, we’ve seen reductions in those quarters and so we’re not investing such that it’s offsetting all the savings. Just think that as we get into holiday, we’re going to do what’s right for the customer and not as focused on hitting an SG&A number. So, there is a ton of leverage in business and so if you can get the top line moving in the right direction and continue some of the trends that we're seeing and we feel really good about the decisions that we’ve made from a cost structure standpoint.

David J. Glick - Buckingham Research Group, Inc.

Right. Thank you. Mike sorry to interrupt you.

Mike Ullman

Not a problem. In terms of the home for spring season, I don’t want to overstate the issues on lead times. I think furniture is the biggest issue and we only have furniture in a big way in the 150 stores – we’ve the 150 stores that with a smaller assortment. There are some of the same issues in lamps and other decorative accessories, but if we look at the pieces that are working, we’re in great shape in house wares, it’s the best trending business there. Window it’s undersized, but we have the right assortments. We have the leading soft window business in the United States, we’re not going to lose that. In cookware we’ve great assortments, we’re - Calphalon is an important beacon for us and we’re well stock there. So, I don’t think we’re impaired in spring season. Opening price points probably the biggest opportunity. It was spring merchandises that comes in and I think that is the customers back in the store for apparel, she is back in the store for attractions like Sephora, Liz Claiborne, Modern Bride and so forth.

We think that weekends particularly home is a destination for the family, whether it’s in the coffee statement or whether it’s in gadgets or whatever they find exciting. We talk a lot about the difficulties with home. Frankly, we have a best looking home store in the industry at this point. We spent quite a lot to get there, the issues are self inflicted wounds in terms of the way it’s merchandised and I think Liz and her team know exactly what to do to fix it. So thanks for the question.

David J. Glick - Buckingham Research Group, Inc.

Thank you very much. Good luck.

Mike Ullman

Thank you.

Operator

Thank you for your questions ladies and …

Mike Ullman

So with that we like to thank you for joining the call and look forward to seeing you in the future.

Operator

Thank you for your participation in today’s conference. That concludes the presentation. You may now disconnect. Good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: J.C. Penney Company's CEO Discusses Q2 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts