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