Losses at J.C. Penney double, sales slide, as do shares
Plano, Texas — Losses at J.C. Penney doubled in the first quarter and sales at established stores fell again, capping a terrible week for retailers.
Though the loss wasn’t as bad as many industry analysts had expected, the decline in revenue was and sales at stores open at least a year, a key industry metric, fell for the third consecutive quarter.
Shares of other retailers, which took a huge hit Thursday after dismal reports from Macy’s and Nordstrom, began to decline again after stabilizing overnight.
J.C. Penney tumbled more than 9 percent Friday in premarket trading.
For the three months ended April 29, Penney lost $180 million, or 58 cents per share. A year ago the Plano, Texas, company lost $68 million, or 22 cents per share.
Stripping out certain items, earnings were 6 cents per share. Analysts polled by Zacks Investment Research were calling for a loss of 22 cents per share.
Penney’s revenue declined from $2.81 billion, to $2.71 billion, which was worse than Wall Street had expected.
Sales at stores open at least a year dropped 3.5 percent. Analysts watch that figure closely as a signal of a retailer’s health because it excludes the volatility of stores that were recently opened or closed.
This week, Macy’s, Nordstrom and Kohl’s posted fading same-store sales numbers as well.
In addition to trying to chase shoppers who have migrated on line, like all retailers must do, J.C. Penney has been forced to recover from a catastrophic transformation under a one-time Apple executive.
Marvin Ellison took over as CEO in 2015. He has brought major appliances like washing machines back to the stores and is quickly expanding the number of Sephora beauty shops in its stores.
J.C. Penney is also trying to modernize, equipping its workers with mobile devices to help online shoppers pick up orders in the store.
Yet shares are down 32 percent so far this year.
J.C. Penney’s decision to postpone liquidation sales at 138 stores targeted to close may suggest that the company is trying eke out something from the stores after a weak spring, said Kimberly Greenberger, an equity analyst at Morgan Stanley.
Executives said Friday that they still expect full-year adjusted earnings between 40 cents and 65 cents per share. Analysts polled by FactSet predict earnings of 48 cents per share.