FILE PHOTO: A shopper leaves the J.C. Penney department store in North Riverside, Illinois, U.S., November 17, 2017. REUTERS/Kamil Krzaczynski
March 2, 2018
(Reuters) – Sales at J.C. Penney Co Inc’s <JCP.N> established stores missed Wall Street targets in the fourth quarter, and its forecast for yearly earnings also lagged expectations, pushing its stock down 9 percent on Friday.
The results contrast strong holiday-quarter sales from Macy’s <M.N> and Kohls Corp’s <KSS.N> earlier this week and underscore the struggle faced by some retailers in the face of unceasing competition from Amazon.com Inc <AMZN.O>.
J.C. Penney’s weaker-than-expected sales growth also follows a rosy forecast from the retailer, which said in January it saw strong demand for home, beauty products and jewelry.
Its comparable-store sales rose 2.6 percent in the fourth quarter ended Feb. 3, missing analysts’ average estimate of a 2.94 percent increase.
J.C. Penney forecast full-year earnings of between 5 and 25 cents per share, largely below analysts’ average expectation of 20 cents, according to Thomson Reuters I/B/E/S.
The company also said on Friday it had cut about 230 jobs, a move expected to save between $20 million and $25 million in costs annually.
Its net profit fell to $254 million in the fourth quarter from $192 million, a year earlier. Excluding one-time items, J.C. Penney earned 57 cents per share, ahead of the analysts’ estimates of 47 cents.
Net sales rose 1.8 percent to $4.03 billion, missing expectations of $4.05 billion.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sai Sachin Ravikumar)
