J.C. Penney Posts Worse-Than-Expected Sales
13 May 2016 - 10:50PM
Dow Jones News
J.C. Penney Co. on Friday reported an unexpected decline in
revenue in the first quarter of the year, unable to avoid a slump
in sales that has battered the retail industry.
Shares, already down 22% this month, lost another 13% premarket
to $6.80.
"The first quarter was clearly challenging from a sales
perspective," said Chief Executive Marvin Ellison, noting that "our
business was not immune to the issues facing other retailers."
On Wednesday, Macy's Inc. set off fresh fears about the health
of the U.S. retail sector as the country's largest department-store
chain reported its worst quarterly sales since the recession. After
that, Nordstrom Inc. cut its financial projections for the year
following worst-than-anticipated results for the first-quarter, and
said it needed bigger discounts to clear inventory. Kohl's Corp.,
meanwhile, posted a 87% drop in profit in the latest quarter and a
surprise decline in sales.
In all for the quarter, Penney's loss narrowed to $68 million,
or 22 cents a share, from $150 million, or 49 cents a share, a year
earlier. On an adjusted basis, the loss was 32 cents. Analysts
polled by Thomson Reuters had expected an adjusted loss of 38 cents
a share.
Sales slipped 1.6% to $2.81 billion, below analysts' forecast
for a rise to $2.92 billion. Sales at existing stores fell 0.4%.
Still, Penney backed its same stores sales guidance for growth of
3% to 4% this year, citing "the positive nature of our recent sales
trends," strength in its Sephora business and accelerated appliance
rollout.
Gross margin edged down to 36.2% from 36.4% a year earlier, hurt
by additional markdowns due to unseasonable weather.
Penney said its men's line, footwear and handbags, and Sephora
were among its top-performing divisions.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
May 13, 2016 08:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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