J.C. Pen­ney stock sinks to all-time low

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - JOSEPH PISANI

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.

AP/Tyler Morn­ing Tele­graph/SARAH A. MILLER

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.”

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