J.C. Penney Co. Inc. (NYSE: JCP) is scheduled to report fiscal first-quarter earnings on May 13, and by the look of it, the good news from the fourth quarter will not be repeated. According to a news report on Friday, the company was forced to cut back employee work hours last month in an effort to reduce expenses. The report sent the stock down 7.5% for the day.
In the fourth quarter, J.C. Penney posted a profit and same-store sales growth of more than 4%. Just ahead of reporting first-quarter report, the company was so desperate to reduce costs that it cut employee hours in the last half of April to save an average of around $8,000 per store.
According to the report in the New York Post, poor sales in April forced J.C. Penney to take unprecedented cost-cutting steps in order to maintain its bottom line. The company also banned the use of corporate credit cards and forbade more price markdowns during the period. Full-time and part-time employees reportedly had their working hours reduced.
The Post cited an internal memo from J.C. Penney:
We have an expense challenge for the month of April and are asking all stores to do their fair share by closely monitoring all expenses.
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