PLANO, Texas -- Losses at JCPenney (JCP.N) doubled in the first quarter and sales at established stores fell again, capping a terrible week for retailers.
Though the loss wasn't as bad as many industry analysts had expected, the decline in revenue was and sales at stores open at least a year, a key industry metric, fell for the third consecutive quarter.
Shares of other retailers, which took a huge hit Thursday after dismal reports from Macy's (M.N) and Nordstrom (JWN.N), began to decline again after stabilizing overnight.
JCPenney tumbled more than nine per cent Friday in premarket trading.
For the three months ended April 29, JCPenney lost US$180 million, or 58 cents US per share. A year ago the Plano, Texas, company lost US$68 million, or 22 cents US per share.
Stripping out certain items, earnings were six cents US per share. Analysts polled by Zacks Investment Research were calling for a loss of 22 cents US per share.
JCPenney's revenue declined from US$2.81 billion, to US$2.71 billion, which was worse than Wall Street had expected.
Sales at stores open at least a year dropped 3.5 per cent. 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 (KSS.N) posted fading same-store sales numbers as well.
There is good news and bad news for retailers like JCPenney, Macy's, Nordstrom and others. Americans are spending money. They're just not spending it at department stores.
Data released Friday by the U.S. Commerce Department shows that Americans stepped up spending in April, but that money went largely to auto dealers, online stores or places like hardware stores.
In the same period, sales at department stores fell 0.2 per cent.
In a category that includes online retailers, sales grew of 1.4 per cent, the strongest of any group.
The path through the new retail landscape was been made even more difficult for JCPenney after its catastrophic transformation several years ago under a one-time Apple executive.
Marvin Ellison took over as CEO in 2015. He has brought major appliances like washing machines back to the stores and is quickly expanding the number of Sephora beauty shops in its stores.
JCPenney is also trying to modernize, equipping its workers with mobile devices to help online shoppers pick up orders in the store.
JCPenney's decision to postpone liquidation sales at 138 stores targeted to close may suggest that the company is trying eke out something from the stores after a weak spring, said Kimberly Greenberger, an equity analyst at Morgan Stanley.
Ellison said that trends over the past two months are positive.
"While February was a very challenging month for JCPenney 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.
Executives said Friday that they still expect full-year adjusted earnings between 40 cents US and 65 cents US per share. Analysts polled by FactSet predict earnings of 48 cents US per share.
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