JC Penney's net loss widened in the first quarter as the department-store chain works to rebound from former CEO Ron Johnson's failed makeover.
The loss expanded to $348 million in the quarter ended May 4 from a deficit of $163 million a year earlier. CEO Myron Ullman, who returned as CEO last month, has been increasing promotions to revive sales and raising cash by borrowing $850 million from the company's credit line while pursuing a $1.75 billion loan. First-quarter sales declined 16% to $2.64 billion.
"The loss was a little worse than I expected, but this story isn't about this quarter, it's about looking out," said Rick Snyder, an analyst for Maxim Group in New York. Mr. Ullman is "taking the right steps. He's trying to get the customer back, and the way to do that is discounting and couponing again," he said.
Mr. Ullman faces plenty of challenges in winning back customers who were alienated after Mr. Johnson removed promotions and swapped in clothing aimed at younger women. The chain released commercials this month saying it learned from its mistakes and thanked customers for giving it another chance.