The stock price of JC Penney Company (NYSE:JCP) plunged nearly 4% to $7.50 per share around 2:55 in the afternoon today after reporting lower-than-expected revenue for the first quarter.
JC Penney financial results
JC Penney posted $2.81 billion in revenue, down 1.6% from $2.85 billion in the same period a year ago. Wall Street analysts expected the department store operator to report $2.92 billion in revenue.
Its same-store sales declined 0.4% compared to a 3.35 gain expected by analysts. Its EBITDA climbed 63% to $178 million.
Its net loss declined from $0.49 per share to $0.22 per share, an improvement of 55%. Analysts expected a net loss of $0.37 per share.
JC Penney released its financial performance the same day as the U.S. Department of Commerce reported that retail sales increased 1.3% last month driven by auto retailers and e-commerce companies.
In a statement, JC Penney CEO Marvin Ellison said, “The first quarter was clearly challenging from a sales perspective. Although our business was not immune to the issues facing other retailers, I am pleased that we were able to deliver our second consecutive quarter of positive operating profit. In addition, the teams did an excellent job of proactively managing the business throughout the quarter to ensure we remained a fiscally disciplined organization.”
For the fiscal 2016, JC Penney expected its comparable store sales to increase 3% to 4%, gross margin to climb 10 to 30 basis points. The company estimated its EBITDA to be $1 billion and to achieve positive adjusted earnings per share.
JC Penney is confident of achieving its guidance citing the reason that sales performance improved in the final two weeks of April and early this month.
During a conference call with analysts, Ellison said the company’s hair saloon and window-treatment department could help boost its financial performance while rolling out large appliances to 500 stores.
Ellison said, “These initiatives in the second half for the year are very significant.”
Earlier this week, Macy’s (NYSE:M) also reported lower-than-expected financial results for the first quarter. Its CEO Terry Lundgren warned of continued weakness in consumer spending.