JC Penney shares sank at the market open Friday after the retailer's quarterly loss widened and same-store sales fell more than expected. Fred Katayama reports.
Investors thrashing JC Penney Friday. The department store operator's quarterly loss widened more than Wall Street had expected because it liquidated inventory in 127 stores it closed. Sales at established stores fell for the fifth straight quarter - down 1.3 percent, That was a bit worse than expected. That's a sharp contrast to Macy's and Kohl's whose profit and same-store sales results had beaten consensus targets. Penney's shares plummeted at the market open Friday to a record low, deepening their already steep 43 percent loss this year. Craig-Hallum senior analyst Alex Fuhrman, who cut his price target on JC Penney, said, "The shift of sales towards JC Penney's margin-eroding e-commerce channel is a perpetual drag on margins that is finally catching up with the company." On the plus side, Penney's revenue rose, and it saw an improvement in its apparel business which had been a drag in past quarters. The retailer reaffirmed its outlook for the fiscal year, which calls for comparable sales to range between a loss or gain of 1 percent. Declining mall traffic has hurt department stores like Penney. So too has competition from discount retailers and e-commerce giant, Amazon.com. Penney has been closing stores, revamping how it replenishes stores, and boosting private brands in a bid to rejuvenate its business.