J.C. Penney outlook spooks Wall Street
New York – J.C. Penney cut its outlook for the year as it trims costs to help offset declining revenue.
The company’s first-quarter loss is along the lines of what analysts had expected, and revenue topped expectations. But its outlook for the year is short of most projections.
Shares slid 11 percent early Thursday.
The quarterly loss narrowed to $78 million, or 25 cents per share. Adjusted for one-time items, the loss was 22 cents per share.
The Plano, Texas, department store’s revenue fell 4.1 percent to $2.67 billion, beating projections of $2.6 billion, according to a survey by Zacks Investment Research.
The company is trying to cut costs and make the chain better able to reach shoppers jumping back and forth between online and physical locations. Department stores, which are heavily dependent on clothing sales, are seeing more competition from online retailers like Amazon.com.
Same-store sales rose slightly, marking a turnaround from a 3.5 percent drop a year prior. The metric – which measures sales in stores open at least at least a year – is a key metric of a retailer’s health.
J.C. Penney Co. now expects full-year results to range from a loss of 7 cents per share to earnings of 13 cents per share. It previously forecast a potential profit range of 5 cents to 25 cents per share. Analysts expect 16 cents per share, according to FactSet.