Shares of J.C. Penny Co Inc. (NYSE: JCP) plummeted as much as 27% to under USD 2 for the first time on Thursday after forecasting a surprise loss for the year and posting disappointing results from price cuts across product lines.
The department store chain said it now expects a loss between USD 1 per share and 80 cents per share, compared to its previously estimated range of 7 cents to 13 cents.
“We took necessary actions to mark down and clear excessive inventory positions across many of our categories, which encompasses more than just seasonal product or fashion misses,” Chief Financial Officer Jeffrey Davis said. “We will continue to take actions to right-size our inventory.”
J.C. Penny, which has been without a chief executive since May, also posted a wider-than-expected loss for the quarter ended Aug. 4th, and disappointing same-store sales, a closely-watched measure for retailers.
“We don’t see an immediate catalyst for investors to get more bullish until the Street is more comfortable with the future of its management team and has a clearer sense of the company’s strategic direction going forward,” Gordon Haskett analyst Chuck Grom wrote in a pre-earnings note.
The results from Thursday showed same-store sales rose 0.3%, short of an analysts’ average estimate of about 1%. Net losses widened to USD 101 Million, or 32 cents per share, in the second quarter ended Aug. 4 from USD 48 Million, or 15 cents per share, a year earlier.
Excluding one-time items, the chain posted a loss of 38 cents per share, while analysts were expecting a loss of 6 cents per share, while total revenue also missed expectations.