Bell-bot­tom blues: Pen­ney back to ’70s price

New York Post - - BUSINESS - By LISA FICKENSCHER lfick­en­scher@ny­

JC Pen­ney’s stock price just took a trip back to the last days of disco.

The strug­gling de­part­ment store chain’s shares hit an all-time low on Fri­day — be­low where they de­buted in 1978 — as worse-than-ex­pected sales and widen­ing losses spooked in­vestors.

The Plano, Texas-based re­tailer said its sales at stores open at least a year took a steeper-than-ex­pected drop of 1.3 per­cent in the most re- cent quar­ter amid stiff dis­count­ing that ham­mered profit mar­gins.

To­tal sales rose 1.5 per­cent to $2.96 bil­lion, but the lack­lus­ter growth stoked jit­ters on Wall Street that shop­ping malls are be­com­ing a hos­tile en­vi­ron­ment for busi­ness.

Pen­ney shares plum­meted nearly 17 per­cent to close at $3.93 af­ter hit­ting a record low of $3.77 ear­lier in the day.

JC Pen­ney Chief Ex­ec­u­tive Mar­vin El­li­son blamed the poor show­ing on the fact that the com­pany had closed 127 stores in a sin­gle quar­ter and was forced to eat the cost of liq­ui­dat­ing mounds of un­sold mer­chan­dise.

Pen­ney lost $62 mil­lion, com­pared with $56 mil­lion a year ago.

“These events were iso­lated to the sec­ond quar­ter,” El­li­son said in a Fri­day state­ment.

Oth­ers didn’t see it that way, with Gor­don Has­kett an­a­lyst Chuck Grom de­scrib­ing the re­sults as “al­most as de­press­ing as be­ing a New York Jets sea­son-ticket holder.”

Pen­ney’s weaker-than-ex­pected same-store sales stood in con­trast to those from Macy’s and Kohl’s. The larger ri­vals had re­ported bet­terthan-ex­pected quar­terly profit and com­pa­ra­ble sales on Thurs­day, although their shares got sold off, too.

It wasn’t all doom and gloom at Pen­ney’s 1,021 mid­dle-mar­ket stores. Among the best-per­form­ing cat­e­gories were home, fine jew­elry, footwear and hand­bags, and cos­met­ics at Sephora, El­li­son said.

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