PLANO, Texas -- Losses at J.C. Penney Co. doubled in the first quarter, and sales at established stores fell again, capping a terrible week for retailers.
Though the loss at first did not appear as bad as many industry analysts had expected, many soured on even that after a closer look.
"Don't be fooled by the bottom line beat; it was entirely due to a real estate gain that we had not included in our forecast," wrote Citi analyst Paul Lejuez.
The direction for sales at J.C. Penney was clear, however, particularly at stores open at least a year, which fell for the third consecutive quarter.
Shares of other retailers, which took a huge hit Thursday after dismal reports from Macy's and Nordstrom Inc., fell again after stabilizing overnight.
J.C. Penney stock tumbled at the opening bell. The shares fell 74 cents, or 14 percent, to close Friday at $4.55.
Revenue declined from $2.81 billion, to $2.71 billion, which was worse than Wall Street had expected.
For the three months ending April 29, Penney lost $180 million, or 58 cents per share. A year ago the Plano, Texas, company lost $68 million, or 22 cents per share.
Stripping out certain items, earnings were 6 cents per share. Analysts polled by Zacks Investment Research expected a loss of 22 cents per share, though those estimates were revisited by analysts because of asset gains.
Sales at stores open at least a year dropped 3.5 percent. Industry analysts watch that figure closely as a signal of a retailer's health because it excludes the volatility of stores that were recently opened or closed.
This week, Macy's, Nordstrom and Kohl's Corp. posted fading same-store sales numbers, as well.
There is good news and bad news for retailers such as J.C. Penney, Macy's, Nordstrom and others. Americans are spending money. They're just not spending it at the department stores that have been the cornerstone of the shopping experience in the U.S. for decades.
Data released Friday by the U.S. Commerce Department show that Americans stepped up spending in April, but that money went largely to auto dealers, online stores or places such as hardware stores.
In the same period, sales at department stores fell 0.2 percent.
In a category that includes online retailers, sales grew 1.4 percent, the strongest of any group.
The path through the new retail landscape was made even more difficult for J.C. Penney after its catastrophic transformation several years ago under a one-time Apple executive.
Marvin Ellison took over as CEO in 2015. He has returned major appliances such as washing machines to the stores and is quickly expanding the number of Sephora beauty shops in its stores.
J.C. Penney is also trying to modernize, equipping its workers with mobile devices to help online shoppers pick up orders in the store.
J.C. Penney's decision to postpone liquidation sales at 138 stores targeted to close may suggest that the company is trying to eke out something from the stores after a weak spring, said Kimberly Greenberger, an equity analyst at Morgan Stanley.
Ellison said trends over the past two months are positive.
"While February was a very challenging month for J.C. Penney and broader retail, we are pleased with our comp store sales for the combined March and April period, which improved significantly versus February," he said.
Business on 05/13/2017