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The embattled retailer received a notice from the New York Stock Exchange after Friday’s closing bell indicating that it’s no longer in compliance with listing criteria. Shares are required to maintain an average closing price of at least $1 over a 30-trading day period. The company has six months to regain compliance.
“The Company intends to pursue measures to cure the share price non-compliance, including through a reverse stock split of the Company's common stock, subject to stockholder approval, if such action is necessary to cure the non-compliance,” J.C. Penney said in a press release. A reverse split reduces the number of shares outstanding and increases the stock’s price by the same factor.
On Monday, the retailer announced the appointment of six executives to help execute its turnaround plan. In October, the J.C. Penney rolled out new concepts in an effort to return to profitability, including remodeling stores with fitness studios, video game lounges and cafes.
J.C. Penney shares have plunged more than 93 percent since March 2016 amid changing consumer preferences and a shift to e-commerce shopping from brick-and-mortar.
The company’s market capitalization hit a peak of $19.5 billion on June 19, 1998, according to Dow Jones Market Data. It was below $240 million at the end of the day Friday.
J.C. Penney is scheduled to report its fourth-quarter and fiscal 2019 results on Feb. 27. The company expects full-year comparable sales to fall between 7 percent and 8 percent, and believes free cash flow will be positive.
Wall Street analysts surveyed by Refinitiv are expecting an adjusted fourth-quarter loss of 7 cents a share on revenue of $3.44 billion.
J.C. Penney shares are down 33.5 percent this year, significantly underperforming the S&P 500’s 0.2 percent drop.