JC Penney reports disappointing first quarter sales
JC Penney is the latest department store chain in the US to report disappointing first quarter sales.
The retailer reported losses of $180 million, or 58 cents per share in the period ended April 29, with same-store sales down 3.5%. According to Bloomberg, analysts had forecast a loss of 21 cents.
Last year, the Texas-based retailer reported losses of $68 million, or 22 cents per share.
Revenue dropped from $2.81 billion, to $2.71 billion, falling short of what analysts had forecast.
“Obviously we had a very challenging quarter in a challenging environment,” said chief financial officer Ed Record.
Earlier this week, rival department store chains Macy’s and Nordstrom also reported lackluster sales figures.
J.C. Penney Chief Executive Officer Marvin Ellison said weak sales in February weighed on the quarterly figures.
“My optimism on the future of J.C. Penney is in large part due to the fact that we’re still playing catch-up to many of our competitors,” Ellison said. “We know the upside for profit and revenue exist. We simply have to move faster.”
Although department store chains are struggling, US retail sales increased by 4.5% last month compared with the same month last year, driven by a boom in online shopping sales – up 11.9% year-on-year, according to the US Commerce Department. Sales at department stores in the US dropped by 3.7% year-on-year in April.
Howard Davidowitz, chair of Davidowitz & Associates, a retail consulting firm based in New York, was quoted by the BBC as saying, “That’s the growth area and that’s the whole growth area.”