J.C. Penney Co. Inc. (NYSE: JCP) reported first-quarter 2016 results before markets opened Friday. The venerable retailer reported an adjusted diluted loss per share of $0.32 and $2.81 billion in revenues. In the same period a year ago, it reported a net loss of $0.57 on revenue of $2.86 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for a net loss of $0.38 and $2.92 billion in revenue.

Same-store sales slipped 0.4% in the quarter, compared with an estimate from Retail Metrics for growth of 2.9%.

On a GAAP basis the company lost $0.22 per share, excluding a $24 million gain on a real-estate transaction at its headquarters in Plano, Texas, and other items.

Gross margins fell by two basis points to 36.2% in the first quarter. J.C. Penney said that the quarterly decrease was driven by additional markdowns due to unseasonable weather, partially offset by an improvement in the company’s clearance selling margin.

The company also updated its full-year guidance. The company continues to expect same-store sales to rise by 3% to 4% and that gross margins will improve by 10 to 30 basis points. Gross margins had previously been forecast to rise by 30 to 40 basis points. SG&A spending is still expected to decline and EBITDA is still forecast at $1 billion. J.C. Penney also expects adjusted EPS “to be positive” and free cash flow is forecast to “improve.”

The consensus estimates call for a second-quarter loss of $0.11 per share on revenue of $2.95 billion. Full-year estimates include earnings per share of $0.04 on revenues of $12.97 billion.

The company’s CEO, Marvin Ellison, said:

While our first quarter sales were below our expectations, we are maintaining our annual comp guidance of 3 % to 4 % as a result of the positive nature of our recent sales trends, the strength of our Sephora business and our decision to accelerate our appliance rollout.  However, we are lowering our full year gross margin guidance to a 10 to 30 basis points increase for the year, reflecting the rollout of appliances and the rapid growth of our online business.

J.C. Penney was unable to sustain momentum from its surprise profit in the prior quarter. Same-store sales were down, revenues missed estimates and the company slashed its gross margin improvement for the full year. Does any of this sound like a reason to be upbeat about the rest of the year? Selling appliances is not going to be enough.

One last note: the company’s EBITDA in the first quarter totaled $176 million, up $68 million year over year and adjusted EBITDA totaled $153 million. The path to a full-year total of $1 billion could be rockier than the company expects.

The stock closed down about 1.1% on Thursday at $7.80. In Friday’s premarket session its shares traded down nearly 10%, at $7.04 in a 52-week range of $6.00 to $11.99. Thomson Reuters had a consensus analyst price target of around $11.46 before the results were announced.

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