Before markets open Friday morning, retailer J.C. Penney Co. Inc. (NYSE: JCP) is scheduled to report first-quarter 2016 results. Analysts are looking for a net loss per share of $0.38 and revenues of $2.92 billion. In the same quarter last year, the company posted a net loss of $0.57 per share on revenues of $2.86 billion.
Things were going pretty well for J.C. Penney until about a week ago, when a report in the New York Post revealed that poor sales in April forced the company to take unprecedented cost-cutting steps in order to maintain its bottom line. J.C. Penney also banned the use of corporate credit cards and forbade more price markdowns during the period. Both full-time and part-time employees had their working hours reduced.
Since that report, shares have tumbled more than 13% from $8.93 at last Thursday’s closing bell to $7.74 in the noon hour Thursday. Analysts reacted by increasing their estimated quarterly per share loss from $0.36 to $0.38, although that’s still an improvement of an expected quarterly loss of $0.41 registered three months ago.
In the fourth quarter of the last fiscal year, J.C. Penney reported net income per share of $0.39, far above the prior year’s quarterly loss of $0.11 and even further above analysts’ consensus for a net loss of $0.23 per share. The company said at the time that it expected same-store sales to rise 3% to 4% in the current fiscal year, gross margins to improve by 40 to 60 basis points, and EBITDA to rise to $1 billion. By the end of the year, J.C. Penney expects adjusted earnings to be positive and free cash flow to improve.
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