JCPenney Shares Plunge as Same-Store Sales, Revenue Fall
JCPenney (NYSE:JCP) joined a growing list of big-name retailers reporting disappointing same-store sales in the first quarter, sending shares to an all-time low.
The company said its net loss widened to $180 million or 58 cents per share during the quarter, from 22 cents per share the year prior. Excluding one-time charges associated with the chain’s restructuring efforts, the company said adjusted net income improved by $116 million to six cents per share, compared to a net loss of $97 million the year prior. Wall Street analysts had expected a loss of 21 cents per share for the quarter.
Revenue dipped from the year prior, coming in at $2.71 billion, slightly below expectations for $2.77 billion. Meanwhile, sales at stores open at least a year – a key metric for retailers – dropped 3.5% for the quarter. The company said it saw positive sales growth in its home, Sephora, fine jewelry, and salon categories, an area that CEO Marvin Ellison told analysts on the company’s earnings call Friday morning he wants to be “dominant” in.
“We continue to make encouraging progress in the company’s competitive and financial position despite our top-line performance during the quarter,” Ellison said in a statement. “Our teams remain committed to executing on our strategic growth initiates and we are confident in our ability to drive sustainable growth and long-term profitability for JCPenney.”
JCPenney has been pressured by e-commerce competitors including Amazon (NASDAQ:AMZN) online and TJX (NYSE:TJX) brands Marshalls and Home Goods as shoppers prefer convenience and treasure hunt experiences over traditional department-store formats. Over the last several quarters, Ellison and his team have reiterated their focus on better positioning the company toward e-commerce platforms, leveraging some of its bricks-and-mortar stores that can serve as online-order distribution centers.
Earlier this year, the company said it would shutter 138 stores in 41 states in mid-June, but delayed the planned liquidation and closure processes to July 31 after shoppers flocked to those locations seeking discounted products.
The key to driving sales growth after the store closures, Ellison said, will be leveraging the company’s e-commerce business and loyalty programs. He pointed to the recently launched mobile app that allows JCP to push coupons, rewards, promotions, and gift cards to customers in one place.
“It’s one-stop shop access for all the things they earned from JCPenney,” he said. “It will drive a great opportunity for us to engage our customers on an ongoing basis and do a variety of other things: Price checking, pick up orders.”
What’s more, he added that with declining mall traffic, marketing efforts alongside e-commerce tools will take increased importance on an ongoing basis. Ellison vowed to make changes to the marketing strategy to identify the right offerings to the appropriate customers.
JCPenney shares declined more than 13% on the session to as low as $4.48. So far this year, the stock has shed 36% of its value. Shares of other department-store retailers fell alongside JCPenney for the second-straight day including Nordstrom (NYSE:JWN) and Macy’s (NYSE:M) – both of which reported earnings results on Thursday, as well as Sears (NYSE:SHLD), Kohl’s (NYSE:KSS), Dillards, and a host of others.