When the retailer reported fiscal second-quarter earnings in August, it forecast same-store sales to rise in the “mid-single digits.” Now J.C. Penney has cut the forecast to a low-single digit increase. The company blamed slow sales in September, saying that full-priced sales during the month did not make up for the impact on revenues caused by clearance pricing. J.C. Penney did affirm its previous guidance for a full-year same-store sales rise in the mid-single digit range.
J.C. Penney has been counting on a return to discount pricing and a reintroduction of private label brands to lead the venerable retailer’s turnaround effort. The company got some positive reinforcement from Standard & Poor’s on Tuesday, when the ratings agency said that J.C. Penney’s turnaround plan is working better than the one adopted by Sears Holdings Corp. (NASDAQ: SHLD).
Wednesday, though, both stocks are equals as Sears’s shares are getting lacerated on a report that one vendor has withheld a shipment for lack of credit insurance.
Analysts have cut J.C. Penney’s estimated third-quarter loss from $0.84 to $0.75, either one a vast improvement on last year’s loss of $1.85. While a smaller loss would be welcome, boosting sales from the dismal depths is what analysts and investors are looking for J.C. Penney to produce.
Shares were trading down about 9.9% in the noon hour, at $8.29 in a 52-week range of $4.90 to $11.30.
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