J.C. Penney's Turnaround Hits Stumbling Block With Q1 Sales Miss
J.C. Penney's stock price closed at a historic low on Friday after it missed its first quarter forecast and said customer traffic was below a year ago. While the department store chain said it can still pull off recently lowered full-year targets for flat sales and improvements in margins, investors pummeled the stock. Penney's stock price closed below $5 a share for the first time since at least the early 1980s. CEO Marvin Ellison said in a call with analysts Friday morning that the first-quarter results were disappointing largely because February was "a very challenging month," however, sales improved in March and April, he said.
Total Retail's Take: The first-quarter results were sobering news for those promoting the ongoing turnaround of J.C. Penney. The retailer has now seen same-store sales decrease in four of the last five quarters (last year's second quarter being the exception), and this latest quarter registered the biggest decline at 3.5 percent. J.C. Penney is in the midst of reorganizing its business, including closing 138 stores, and is betting that gains in online sales, Sephora shops in its stores, and appliance sales will help the retailer get back on track to profitability. The retailer has plenty of company in its struggles: department store chains Macy's, Dillard's, Kohl's, and Nordstrom all reported disappointing first-quarter earnings last week.