J.C. Penney reports flat same-store sales as autumn sales slow
J.C. Penney Co Inc reported a smaller-than-expected quarterly loss on Wednesday but said same-store sales were flat and slightly cut its full year revenue forecast, sending shares of the department store chain lower in extended trade.
The company said unusually warm weather had hindered its ability to sell sweaters and other winter goods during October, prompting it to miss its target for low single digit same-store sales growth during the quarter.
But the retailer, which has been on the rebound this year after reversing an ill-fated attempt to move upmarket, said it has been enjoying strong demand for home and jewelery items and its Sephora beauty product shops within its stores.
Chief Executive Myron Ulman said November got off to a good start: "While it's too early to call it a trend, we're pleased with our sales performance during the first 10 days of November," he said on a conference call for analysts.
Shares of J.C. Penney, which had rallied nearly 8 percent to close at $7.76 before the results were announced, slipped to $7.34 in after-hours trade.
The company said it expects same-store sales to rise 2 to 4 percent during the holiday quarter. Rival Macy's Inc said it expected comparable sales to grow 1.8-2.8 percent.
Macy's also reported better-than-expected earnings and its shares closed up 5.1 percent at almost $62.
J.C. Penney said it now expects same-stores sales to grow 3.5 to 4.5 percent for the full year, down slightly from its prior guidance for mid-single digit growth.
The retailer managed to narrow its quarterly loss by 61 percent to $188 million, or 62 cents per share, as it cut back on discounts and reined in costs.
Excluding items, the company posted a loss of 77 cents per share.
Margins improved to 36.6 percent in the third quarter ended Nov. 1 from 29.5 percent a year earlier.
Revenue fell slightly to $2.76 billion.
Analysts on average were expecting a loss of 93 cents per share on revenue of $2.78 billion, according to Thomson Reuters.