J.C. Penney says it has cut jobs, offers muted outlook

NEW YORK — Department store chain J.C. Penney says it has cut more than 300 jobs and reported disappointing sales at established stores for the quarter that includes the holiday season. It also delivered a muted outlook, and its shares fell 8 percent.

The news Friday overshadowed strong profits as investors worried about Penney’s ability to remake itself in a changing retail market — especially after the good economy contributed to stronger results at chains such as Macy’s and Kohl’s.

J.C. Penney eliminated 130 positions across all departments at its Plano, Texas, headquarters, and said restructuring regional, district and store support teams to eliminate bureaucracy led to 230 job cuts. It estimated the cuts will save it $20 million to $25 million a year. It also made changes to its executive team.

The company, like many department stores, is trying to cut costs and make the chain better able to reach shoppers jumping back and forth between online and the stores. Department stores, which are heavily dependent on clothing sales, are seeing more competition there as Amazon.com expands further into fashion and off-price chains like T.J. Maxx add more stores.

CEO Marvin Ellison told analysts Friday that the company has earmarked 300 mall locations where it will aggressively beef up appliances, mattresses, furniture and workwear like overalls. That should increase market share gains as struggling competitors like Sears close.

Revenue at J.C. Penney stores open at least a year rose 2.6 percent, a tad below expectations for a 2.7 percent increase, according to FactSet. In contrast, Kohl’s enjoyed a 6 percent increase in sales at established stores, its largest such gain since 2001. Nordstrom saw a 2.6 percent increase in those sales, and Macy’s broke out of an almost three-year sales slump to post a sales gain of 1.4 percent at existing stores for the holiday period.