JC Penney Company Inc. (NYSE: JCP) still has been experiencing struggles with shares falling 25% on Friday hitting a new all time low of $2.75 after reporting lower than expected sales and profit forecasts due to huge markdowns. The company expects comparable sales to be up 0.6%-0.8% after third quarter results. However, the department store’s expected adjusted loss for the quarter was 40 to 45 cents which is far worse than analysts’ average estimate of 18 cents.
JC Penney has been trying to diversify away from apparel into other areas such as appliances and home improvement. Despite this, the company has been discounting heavily on clothing as apparel marks the largest profit in their business. CEO Marvin Ellison has taken measures to accelerate inventory liquidation across all apparel divisions to increase available funding to invest in new and trending merchandise categories. Chief Financial Officer Jeffrey Davis will try to improve the company’s pricing and planning policies as well to improve predictive analytics.
The department store predicts that comparable sales would be down 1% which is below previous forecast for the year. Full year adjusted earnings forecast is expected to be 2-8 cents per share rather than 40-65 cents. JC Penney’s preliminary quarterly report brought down shares of Macy’s and Kohl’s as well which left JC Penney’s stock market value of about $855 million with shares dropping 75% from their 52 week high.