J.C. Penney Store | Source: Shutterstock
PLANO, United States — J.C. Penney Co Inc’s shares lost a quarter of their value on Thursday after the department store chain cut its full-year forecast and posted lower-than-expected quarterly results on heavy discounting to clear slow-moving inventory.
Shares of the company were trading at $1.79 before the bell, on track to open at a record low as the results underscored the retailer’s struggles with growing competition from the likes of Amazon.com Inc.
The company said it now expected a loss of between $1 per share and 80 cents per share, much bigger than its previously estimated loss of between 7 cents and 13 cents.
“We took necessary actions to markdown and clear excessive inventory positions across many of our categories, which encompasses more than just seasonal product or fashion misses,” Chief Financial Officer Jeffrey Davis said. “We will continue to take actions to right-size our inventory.”
Same-store sales rose 0.3 percent, missing analysts’ average estimate of about 1 percent, according to Thomson Reuters I/B/E/S.
Net loss widened to $101 million, or 32 cents per share, in the second quarter ended Aug. 4 from $48 million, or 15 cents per share, a year earlier.
Excluding one-time items, J.C. Penney posted a loss of 38 cents per share, while analysts were expecting a loss of 6 cents per share, according to Thomson Reuters I/B/E/S.
Net sales fell to 7.5 percent to $2.76 billion, also missing expectations of $2.86 billion.
The company is yet to find a replacement for Chief Executive Officer Marvin Ellison who left the company in May to join home improvement chain Lowe’s Cos Inc.
By Aishwarya Venugopa; editor: Anil D’Silva