J.C. Penney profit forecast, same-store sales disappoint, shares dive

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(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. FILE PHOTO: A shopper leaves the J.C. Penney department store in North Riverside, Illinois, U.S., November 17, 2017. REUTERS/Kamil KrzaczynskiThe 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 RavikumarOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters