JC Penney shares plunge after 2Q loss

By RetailFOXBusiness

Retail ice age will bottom out in 2020, analyst says

Strategic Resource Group managing director Burt Flickinger discusses his outlook for retail.

J.C. Penney (NYSE:JCP) shares tumbled to a record low on Friday after the retailer posted a fifth straight quarter of weaker sales.

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Rivals Macy’s (NYSE:M) and Kohl’s (NYSE:KSS) beat Wall Street expectations in the second quarter, saying stores open at least a year booked healthier sales than anticipated. J.C. Penney didn’t fare as well. The department-store chain said comparable sales were down 1.3%, a bit worse than an estimate of 1.2%.

J.C. Penney also missed estimates with a wider loss of $62 million, or 9 cents a share on an adjusted basis. Analysts were looking for a loss of 5 cents. Liquidation sales at 127 stores that are closing had a negative impact on earnings and profit margins, J.C. Penney said. Overall, its net sales were up 1.5% at $2.96 billion.

Shares plunged 16% to $3.98 in recent trading. The stock was already down 43% on the year heading into Friday’s session.

Retailers like J.C. Penney have struggled to stem a decline in store traffic as consumers shift more of their spending online. Brick-and-mortar chains have cut costs and closed stores to bolster their bottom lines, while e-commerce giant Amazon.com (NASDAQ:AMZN) continues to expand.

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The latest quarter showed signs of progress for Kohl’s, which noted that traffic in its stores has gained some momentum. The retailer’s July transactions grew year-over-year amid a strong performance by the sports-apparel category, Kohl’s reported on Thursday.

J.C. Penney said its kids’ apparel, which has weighed on sales in recent quarters, showed a “significant acceleration” in the second quarter.

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