By Justina Vasquez
J.C. Penney Co. shares plummeted as the retailer's latest earnings report failed to ease investors' concerns any more than did than Thursday's results from its peers.
The department-store operator's shares were down 23% in premarket trading Friday, after it reported a steeper loss than analysts had expected for the three months ended July 29.
Sales at stores open at least a year fell 1.3%, better than the 3.5% decline in the previous quarter, a pattern similar to that reported by Macy's Inc. and Kohl's Corp. on Thursday. Foot traffic has steadily slowed at brick-and-mortar stores as shoppers increasingly turn to Amazon.com Inc. and e-commerce to spend their dollars.
J.C. Penney Chairman and Chief Executive Marvin Ellison said that although "broader retail remains challenged," improved performance in apparel sales, especially of children's clothing, left it optimistic.
Earnings were dragged down by the 127 store closings and inventory liquidation during the quarter. The company posted a net loss of $62 million, or 20 cents per share, compared with $56 million, or 18 cents per share, a year earlier. On an adjusted basis, the loss amounted to $28 million, or 9 cents per share, compared with $16 million, or 5 cents per share, a year earlier.
Analysts had expected an adjusted loss of 5 cents per share.
Revenue edged up in the quarter to $2.96 billion, from $2.92 billion a year earlier. Analysts had expected revenue of $2.84 billion.
Mr. Ellison said strong early back-to-school sales in August boded well for the second half of the year, keeping the company on track to meet expectations. J.C. Penney reaffirmed its full-year guidance, including earnings per share of $0.40 to $0.65, and comparable store sales of negative 1% to positive 1%.
J.C. Penney said its top-performing divisions in the quarter were home, fine jewelry, footwear and handbags, Sephora and salon. Last month, the company announced it would add a toys division, aiming to cater to children by the start of the holiday season.
Shares were down 23% premarket to $3.65, down 49% from a year ago.
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