Results fail to cheer most retailers
NEW YORK — Sales at established J.C. Penney stores faded again during its most recent quarter, capping a gloomy week for U.S. retailers.
Penney’s stock sunk below $4 Friday to $3.93, an all-time low for the 115-year-old retailer.
Another quarter of falling same-store sales from J.C. Penney Co. come a day after similar reports from Macy’s, Kohl’s and Dillard’s, as people increasingly avoid malls and shop online or at discount retailers. Nordstrom stood alone, reporting that its same-store sales rose in the most recent quarter, when it held its annual anniversary sale.
At established Penney stores, sales fell 1.3 percent during the second quarter. It was the fourth straight quarter of declines for Penney, and it was worse than the 1.2 percent drop that Wall Street analysts expected, according to FactSet.
Penney said its results were hurt by the closing of about 130 stores during the quarter.
“We’ve never liquidated this many stores at one time,” said CEO Marvin Ellison, during a conference call Friday.
Penney, which has about 875 stores left, is making a number of moves to try and reverse its fortunes. The company, which started to sell appliances again last year, said it signed a new deal to sell Electrolux and Frigidaire products. Ellison said he wasn’t concerned about Amazon’s plans to sell Kenmore appliances on its site, a deal Sears Holdings Corp. announced last month. He said Penney customers want to “physically touch” appliances before making the pricey purchases. On Thursday, Macy’s CEO Jeff Gennette had left open the possibility of expanding into appliances and other categories to be more of a one-stop shop.
Ellison said back-toschool sales were off to a “good start,” echoing similar comments from executives at Macy’s and Kohl’s on Thursday.
To get shoppers to spend more, Penney added toy sections in time for the back-to-school season after testing them last year. And the company hopes more young shoppers will visit the Sephora makeup shops inside Penney’s 600 locations, one of the chain’s biggest draws, when a new beauty line from singer Rihanna is launched. “Rihanna has one of the largest social media followings of any celebrity,” Ellison said.