It was another positive quarter for J.C. Penney Co. Inc., as the merchant posted online and total sales increases for Q3, and reported several improvements to its e-commerce business.

J.C. Penney stopped breaking out sales on JCP.com earlier this year, but in a conference call with analysts, CEO Marvin Ellison said the retailer’s e-commerce sales “accelerated since last quarter.” Comparable-store sales, in which the retailer includes e-commerce, increased 6.4%.

Looking ahead, Penney says it has a few main priorities in its quest to regain market share and recover from several years of declining sales and profits.

One is omnichannel, and during the third quarter, J.C. Penney rolled out a test of buy online, pickup in store capabilities in some markets. The offering is showing positive results so far, though Ellison did not disclose details.

 “It’s very clear to us that our effort to improve omnichannel functionality while increasing our online SKU count is key to our future,” Ellison said. 

The department store expanded the SKU count on JCP.com by more than 40% during the quarter, he said, and it increased the number of drop-ship suppliers it works with by 15%. Those suppliers warehouse inventory and ship orders directly to JCP.com buyers, as opposed to Penney housing the inventory in its own fulfillment centers.

Another key for the retailer—especially in competing online with web-only retailers like Amazon.com Inc.—is its private-label business, which Ellison says accounts for more than half of total sales.

“It is our belief that if we grow our private-brand penetration and position these goods online, we will grow our top line, protect our bottom line and have differentiation from pure-play e-commerce competition.”

During the quarter, J.C. Penney also introduced updated versions of its mobile apps, improved its website speed by 30% and increased the number of product reviews by 40%.

The retailer says it is well positioned to have a better holiday shopping season than last year, when it found itself sold out of many items online and in stores. Inventory is up 9.3% versus last year, and 30% of the company’s total investment in inventory will go to its e-commerce business, Ellison said. 

For the period ended Oct. 31, the retailer reported:

• Net sales of $2.90 billion, a 4.7% increase compared with $2.77 billion in the third quarter of 2014.
• A net loss of $137 million versus a loss of $188 million.
• Comparable-store sales, which include revenue from JCP.com, increased 6.4%

For the first nine months of the year, the merchant also reported:

• Net sales of $8.63 billion, a 3.2% increase from $8.36 billion in the first three quarters of 2014.
• Net loss of $442 million versus a loss of $712 million.
• Comparable-store sales increased 4.6%.

With $1.22 billion in 2014 online sales, J.C. Penney is ranked No. 37 in the Internet Retailer 2015 Top 500 Guide. Web sales last year were up  13.0%  from 2013, but down from a peak in 2011, when the retailer  sold $1.59 billion online.

 

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