J.C. Penney on Thursday reported sales that missed analysts’ expectations, blaming the declines on a cooler start to the spring season. The department store chain also cut its full-year earnings outlook.
Its shares tumbled more than 12 percent, falling below $3 apiece, in early trading on the news.
Revenues fell about 4.3 percent to $2.58 billion during the first quarter ended May 5, missing Street estimates for $2.61 billion, according to a Thomson Reuters survey.
Same-store sales rose 0.2 percent but this was also short of analysts’ forecast for roughly 2 percent growth.
Penney’s net loss narrowed to $78 million, or 25 cents per share, from $187 million, or 60 cents a share, a year ago. Excluding one-time items, it lost 22 cents a share, 1 cent better than the 23-cent loss analysts were expecting.
The retailer adjusted its full-year earnings-per-share outlook to be between a loss of 7 cents to earnings of 13 cents. That compares with prior guidance of earnings between 5 to 25 cents a share.
CEO Marvin Ellison said in a statement: “Although our overall top line sales results came in below our expectations for the quarter, we were encouraged by the strong positive comp performance throughout February and March, as well as the last two weeks of April, when temperatures began to normalize.”
Penney said its strongest categories of late include jewelry, Sephora and its salon business, as has been the trend.
Still, the company has been grappling with ways to fix its apparel business, which has lost share to Amazon.com and more brands selling directly to consumers.
Consumer spending overall in the U.S. has been picking up, fueling optimism in the retail industry and boosting many retailers’ stocks in recent days. Shares of Penney had closed Wednesday up more than 5 percent, on the heels of the better-than-expected results from Macy’s.
“[W]e think JCP can clear as the year progresses — as long as initiatives in Women’s Apparel, Home, Beauty, Digital, and others take hold,” Cowen & Co. analyst Oliver Chen said earlier this year. “We like steps JCP has taken over the past year to grow its digital business though investments in infrastructure, technology, and leadership.”
Like its peers, Penney has been looking for ways to trim excess costs and create a shopping experience that blends bricks and mortar with e-commerce. It’s been cutting back on discounting and has started fulfilling and shipping online orders from stores, for examples.
It also announced a round of hundreds of job cuts in March.
Penney’s stock has lost more than 40 percent from a year ago, bringing its market capitalization under $1 billion.
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