J.C. Penney Shares Sink After Losses Exceed Expectations

J.C. Penney Co. Inc. shares sank 16.4% in Friday premarket trading after the retailer reported second-quarter losses that exceeded expectations. J.C. Penney reported a net loss of $62.0 million, or 20 cents per share, after a loss of $56.0 million, or 18 cents per share, for the same period last year. Adjusted losses were 9 cents per share, wider than the FactSet consensus for a 4-cent loss. Sales were $2.96 billion, up slightly from $2.92 billion, and ahead of the FactSet consensus of $2.84 billion. Same-store sales fell 1.3% for the quarter. Nearly all categories had improved sales results, according to Chief Executive Marvin Ellison, and the company liquidated inventory in 127 of its closing stores, which had an impact on earnings and margins. Inventory was $2.8 billion at the end of the second quarter, a 6.8% decline year-over-year. J.C. Penney reaffirmed its full-year 2017 outlook, expecting adjusted EPS of 40 cents to 65 cents and same-store sales between a 1% decline and 1% increase. The FactSet consensus is for EPS of 49 cents. J.C. Penney shares are down 11% for the last three months and 43.3% for the year so far. The SPDR S&P Retail ETF is down 10.6% for 2017 to date, and the S&P 500 index is up nearly 9% for the period.