J.C. Penney on Friday turned in a mixed report for the second quarter, saying that although the retail environment remains challenged, it sees signs of hope in the second half of the year.
But with earnings and same-store sales falling short of Wall Street estimates, Penney’s shares were selling off before the market’s open, recently down more than 15 percent.
Here’s what the company reported vs what Wall Street was expecting:
- Earnings per share: a loss of 9 cents, compared to an expected loss of 5 cents, according to analysts surveyed by Thomson Reuters.
- Revenue: $2.96 billion, compared to a forecast for $2.84 billion, Thomson Reuters said.
- Same-store sales: a 1.3 percent decline, compared to an expected decline of 1.2 percent, according to Thomson Reuters.
“While broader retail remains challenged, we are encouraged by the improved performance in our total apparel business, including a significant acceleration in kids’ apparel,” CEO Marvin Ellison said in a statement.
“Nearly all categories delivered improved sales results during the quarter, with our growth initiatives in beauty, home refresh and omnichannel continuing to deliver positive sales growth.”
Following its fiscal first quarter, Penney’s stock hit what was an all-time low at the time, after the retailer reported a widening net loss and weaker sales traffic.
Higher costs related to store closures and employee severance packages contributed to the disappointing results, J.C. Penney said. The company had booked $220 million of restructuring charges associated with store closings and a voluntary early retirement program.
At the start of the year, Penney’s firmed up plans to downsize its brick-and-mortar fleet, telling investors it will close 138 stores starting on April 17 and running through the second quarter.
Penney’s outlook for fiscal 2017 calls for comparable sales — a closely watched metric — to fall within a range of negative 1 percent to positive 1 percent. It also has forecast adjusted earnings of 40 cents to 65 cents per share.
Notably, other department store chains Macy’s, Kohl’s, Dillard’s and Nordstrom all delivered their quarterly earnings on Thursday. Despite better-than-expected earnings and sales from both Kohl’s and Macy’s, the stocks were both left tumbling on Thursday. Nordstrom, however, saw its shares rise after the market’s close, when it reported same-store sales growth.
As of Thursday’s close, shares of Penney’s have fallen more than 50 percent over the past 12 months. The stock is down 43 percent since the start of the year.
Source: FactSet
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