J.C. Penney posts bigger-than-expected loss, cuts forecast

NEW YORK—J.C. Penney reported a bigger-than-expected loss in its fiscal second quarter as a key sales metric fell well short of Wall Street’s view. The department store operator also cut its fullyear forecast again, and its shares plunged 24 percent.

The dismal report, released Thursday, illustrates the challenges awaiting whoever becomes the next CEO, after Marvin Ellison departed for the top job at Lowe’s in May after less than four years on the job. Penney said the board has met with “highly qualified” candidates so far.

Ellison had tried to refocus J.C. Penney on home appliances and beauty, following a shift by consumers away from spending a lot of money on clothing. He did make some inroads, but the turnaround was far from complete on his departure. And with consumer spending on the rise and other retailers like Walmart doing well, Penney has failed to enjoy the benefit.

Chief Financial Officer Jeffrey Davis, one of four top executives sharing responsibility for day-to-day operations until a new CEO is named, said in a statement that the chain was dealing with some excess inventory, and had to mark down products and take other actions to try to move items.

Sales at stores open at least a year, a key gauge of a retailer’s health, edged up 0.3 percent. Analysts polled by FactSet expected a 1 percent increase.

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 offprice chains like T.J. Maxx add more stores.

Penney has said it plans to refocus on its women’s business, after failing to bring in younger shoppers. It has also earmarked 300 mall locations where it will aggressively beef up appliances, mattresses, furniture, and workwear like overalls.