J.C. Penney stock sinks to all-time low
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 price slipped below $4 Friday morning, an all-time low for the 115-year-old retailer. The shares fell 78 cents, or 16.6 percent, to close Friday at $3.93.
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 Chief Executive Officer Marvin Ellison, during a conference call Friday. “These events were isolated to the second quarter,” he said, adding that the company expects to “deliver improved results in the back half of the year.”
Penney, which has about 875 stores left, is making a number of moves to try to 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 onestop shop.
Ellison said back-to-school 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 more stores 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 600 Penney 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.
Analysts at Jeffries said in a note Friday that they see “some traction” in Penney’s turnaround plan, but said they “remain cautious given a challenged [department] store environment.”
Overall, the company reported a net loss of $62 million, or 20 cents per share, in the three months ending July 29. In the same period a year ago, it reported a loss of $56 million, or 18 cents per share.
Losses, adjusted for onetime gains and costs, came to 9 cents per share, compared with the 6 cents per share loss that analysts expected, according to Zacks Investment Research.
Revenue rose 1.5 percent to $2.96 billion, which beat forecasts of $2.87 billion.
Kenadi Wade, 7, shops this week with her grandparents at a J.C. Penney store in Tyler, Texas. Though Penney reported a quarterly loss Friday of $62 million, the department store chain said back-toschool sales were off to a “good start.”