JC Pen­ney out­look spooks Wall Street

The Trentonian (Trenton, NJ) - - BUSINESS -

NEW YORK » J.C. Pen­ney blamed weak cloth­ing sales on bad spring weather and said it would offer more plus-size fash­ions to try and boost sales.

The com­pany also cut its earn­ings out­look for the year and its stock tum­bled 14 per­cent Thurs­day.

Pen­ney said the cool weather hurt sales of its kids and women’s cloth­ing. Sales of its men’s cloth­ing, how­ever, rose as it in­creased its big and tall selec­tion. It recently hired for­mer basketball player Shaquille O’Neal to hawk its big­ger sizes in com­mer­cials and plans to launch a fash­ion brand un­der O’Neal’s name. CEO Marvin El­li­son said Thurs­day that spe­cial sizes are the com­pany’s “great­est op­por­tu­nity for growth,” and it is look­ing to add to its women’s plus-size as­sort­ment.

Dur­ing the first quar­ter, the com­pany’s sales rose 0.2 per­cent at es­tab­lished stores, nowhere near the 2.1 per­cent growth an­a­lysts ex­pected, ac­cord­ing to Fac­tSet.

Pen­ney’s weak re­sults come a day af­ter ri­val Macy’s re­ported a strong first quar­ter as it in­creased its store la­bel brands. Neil Saun­ders of Glob­alData Re­tail said Pen­ney’s woes may have more to do with in­creased com­pe­ti­tion and lack­lus­ter fash­ions, rather than the weather. “The big­gest prob­lems for JCP are rel­e­vance and pro­file,” Saun­ders said, adding that Pen­ney is not stand­ing out among a “sea of com­pet­ing prod­ucts and con­cepts.”

Pen­ney re­ported a loss of $78 mil­lion, or 25 cents per share, for the three months ended April 5. Ad­justed for one-time items, the loss was 22 cents per share, match­ing what an­a­lysts ex­pected.

Revenue fell 4.1 per­cent to $2.67 bil­lion, beat­ing pro­jec­tions of $2.6 bil­lion, ac­cord­ing to a sur­vey by Zacks In­vest­ment Re­search.

The Plano, Texas-based com­pany now ex­pects full-year re­sults to range from a loss of 7 cents per share to earn­ings of 13 cents per share. It pre­vi­ously fore­cast a po­ten­tial profit range of 5 cents to 25 cents per share. An­a­lysts ex­pect 16 cents per share, ac­cord­ing to Fac­tSet.

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