Agenda-setting intelligence, analysis and advice for the global fashion community.
PLANO, United States — J.C. Penney Co. posted first-quarter revenue that trailed analysts' estimates, becoming the latest US retailer affected by a consumer malaise that's weighing on department-store sales.
Revenue fell 1.6 percent to $2.81 billion in the quarter ended April 30, the Plano, Texas-based company said in a statement Friday. Analysts’ projected $2.92 billion, on average. Same-store sales slipped 0.4 percent. Analysts had estimated a 3.3 percent gain, according to Consensus Metrix.
J.C. Penney's disappointing sales signal that shoppers across the income spectrum are pulling back on purchases of apparel and other discretionary goods. Similarly gloomy first-quarter results have come from fellow discount-oriented chain Kohl's Corp. as well as higher-end rivals such as Macy's Inc. and Nordstrom Inc. J.C. Penney's same-store sales drop was its first in 10 quarters, threatening to erode the optimism the company had generated with a strong performance during the holiday shopping season.
The shares fell as much as 15 percent to $6.62 in early trading in New York. J.C. Penney had surged 17 percent this year through Thursday.
ADVERTISEMENT
Even with sales coming in weaker than expected, J.C. Penney has managed to limit the damage to its bottom line. The loss in the quarter was 32 cents a share, excluding some items. Analysts had estimated a deficit of 37 cents.
The department-store chain also said it still expects to achieve its forecast of earnings before interest, taxes, depreciation and amortisation of $1 billion this year, which would be the highest in five years. That forecast includes increasing same-store sales three percent to four percent. However, the company also said gross margin would only expand as much as 0.3 percentage point, lower than the gain of as much as 0.6 percentage point it had previously projected.
By Matt Townsend; editors: Nick Turner, Kevin Orland and Lisa Wolfson.
