J.C. Penney Company Inc (NYSE: JCP) stock fell more than 10 percent Thursday when the company followed up a disappointing holiday sales season with an equally disappointing first quarter of 2018.
Analysts are optimistic about the changes J.C. Penney has made to its business model, but another horrible quarter leaves investors wondering whether it’s too little, too late for the struggling retailer.
J.C. Penney reported first-quarter adjusted earnings-per-share loss of 22 cents, 1 cent better than the 23-cent loss analysts had expected. However, first-quarter revenue was down 4.3 percent to $2.58 billion, missing consensus estimates of $2.61 billion.
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The most disheartening number for investors was a lackluster 0.2 percent same-store sales growth in the first quarter. Not only did same-store sales growth fall well short of consensus estimates of 2 percent, same-store sales don’t seem to be gaining much traction, even as J.C. Penney has closed its least profitable stores. J.C. Penney closed more than 100 stores in 2017 and has previously announced at least eight more closings in 2018.
J.C. Penney also slashed its fiscal 2019 full-year EPS guidance from a previous range between 5 and 25 cents to a new range between -7 cents and 13 cents. The company maintained its previous guidance for same-store sales growth between zero and 2 percent.
J.C. Penney management blamed poor weather for its disappointing numbers and tried to put a positive spin on the quarter.
“Although our overall top line sales results came in below our expectations for the quarter, we were encouraged by the strong positive comp performance throughout February and March, as well as the last two weeks of April, when temperatures began to normalize,” CEO Marvin Ellison says in a statement. “Overall, we believe that our strategies are beginning to take hold, as we are seeing improvement in a number of areas.”
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Earlier this week, J.C. Penney saw mall retail competitor Macy’s ( M) report robust 4.2 percent first-quarter same-store sales growth and it raised its full-year guidance.
Macy’s stock is up 14.7 percent so far this week, while JCP stock is now down 3.5 percent on the week.
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J. C. Penney Company Inc (JCP) Shares Drop on Weak Quarter, Guidance Cut originally appeared on usnews.com
