J.C. Penney Co. Inc. (NYSE: JCP) closed more than 140 stores last year and faces the prospect it will need to close more soon. Today, it has 860 stores in the United States, including Puerto Rico, along with 98,000 workers. In its recent earnings report, management said most of its revenue decline was due to store closures. However, the full-year guidance was grim enough to warrant a complete examination of how many locations it can really support.

J.C. Penney revenue fell 7.5% to $2.76 billion for the period that ended August 4. Comparable store sales dropped 0.3%. The company lost $101 million, compared to $41 million in the same quarter the year before.

Updated guidance for the balance of the fiscal year:

The Company has revised its 2018 full year guidance as follows:

Comparable store sales: now expected to be approximately flat; and Adjusted earnings per share1: now expected to be ($1.00) to ($0.80)

The company still does not have a chief executive officer, and it would be a wonder that any talented retail executive would want to join the company.

One obvious part of the retail industry is that flat companywide same-store sales mean that some stores have same-store sales that are falling — some falling rapidly. J.C. Penney management is in no position to support these and see if they can be turned around.

Management must have learned a number of lessons when they closed 141 stores last year. Those lessons will extend into the near future. J.C. Penney has too many stores.

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