JCPenney had a tough begin to the 12 months after a sequence of disappointing quarters, reporting a larger-than-expected $69 million adjusted web loss in its first-quarter earnings announcement Thursday.
Shares of the division retailer chain plummeted 11 p.c to lower than $2.80 per share on the heels of the report, which put comparable gross sales at a meager 2.1 p.c and lowered anticipated earnings to between 13 cents per share on the excessive finish, and a lack of 7 cents on the low finish, once more lacking analyst forecasts.
Sales, which had been anticipated to fall 2.7 p.c to $2.6 billion, in actual fact dropped four.three % to $2.58 billion, in comparison with $2.7 billion for the primary quarter of 2017. The firm blamed the hit on the closure of 141 shops within the final half of the 12 months, a part of its strategic closure plan to streamline the enterprise.
The information is particularly discouraging as a result of this quarter ought to have been a powerful one: shopper spending is at a excessive and customers have additional of their pockets following Trump’s tax cuts. Macy’s, one of many chain’s prime rivals, on Wednesday reported robust comparable gross sales and raised its earnings steering for the complete 12 months. Another rival, Sears, has been closing places at a fast clip with the intention to maintain the floundering enterprise afloat, giving up mall marketshare to JCPenney.
Chief government Marvin R. Ellison blamed the poor gross sales partially on the cool climate and “very late start to Spring,” an element that didn’t impression Macy’s backside line, in response to CEO Jeff Gennette (although the retailer doesn’t escape e-commerce gross sales from its complete figures).
While Ellison pointed to enhancements within the firm’s attire class, strengths in males’s, jewellery, Sephora, and its salon, and partnerships with manufacturers together with Nike, Adidas, and Puma, it’s nonetheless saddled with $four.1 billion in long-term debt, and competitors from on-line retailers isn’t more likely to abate any time quickly.