Nov 15, 2018
J.C. Penney cuts sales forecast after poor third quarter, shares dive
Nov 15, 2018
J.C. Penney Co Inc cut its forecast for annual sales on Thursday while also withdrawing its outlook for full-year earnings, adding to nerves over the future of another one of America’s best known retail names.
Shares in the company dropped nearly 12 percent to $1.10 in premarket trade after the department store chain’s same-store sales in the third quarter fell well short of Wall Street estimates.
J.C. Penney has for years struggled to excite consumers with its mid-priced range of apparel as they increasingly prefer fast-fashion brands and shop online.
The Plano, Texas-based company said sales at stores open for at least 12 months fell 5.4 percent in the three months ended Nov. 3. Wall Street analysts on average had expected a 0.61 percent decline, according to IBES data from Refinitiv.
“While restoring JCPenney to sustained profitable growth will be a lengthy process, I understand the need for quick action,” said Jill Soltau, the retailer’s newly appointed chief executive officer.
The company now expects comparable-store sales for fiscal 2018 to fall in the low single digits, compacted with an earlier projection of sales being unchanged year-over-year.
J.C. Penney withdrew its annual earnings forecast, to give its new chief executive officer and interim chief financial officer more time to assess the business.
Its quarterly net loss widened to $151 million, from $125 million a year earlier.
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