J.C. Penney Company, Inc (NYSE:JCP) has been warned by the NYSE that it faces delisting from the exchange as JCP stock continues to tumble.
The struggling American department store chain, which has 865 stores in the US and Puerto Rico, has seen its share price trade below $1.00 for 30 consecutive days, which represents a failure to meet NYSE criteria. The company has announced it will pursue measures to attempt to correct this to continue to trade on the exchange, which includes a possible reverse stock split. JCP stock is currently trading at $0.55, which is an all-time low.
“On August 6, JCP received notice from the NYSE that it didn’t comply with the rule requiring an average closing price of at least $1/share over a consecutive 30-day trading period. If the stock split happens, it will be subject to shareholder approval with a vote happening no later than the next annual shareholders meeting,” the company stated in a press release. J.C. Penney has a six-month cure period to correct the situation.
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JCP stock has been struggling as a result of disappointing financial results for the company, which is also highly indebted. Last week, the company posted its second-quarter earnings, which saw revenue of $2.6 billion USD, a 7% decrease from the same period last year. In-store sales also fell by 9% as the company struggles to compete with online retailers due to its lack of digital presence. JCP also has a $3.8 billion USD debt load, which does not make for pleasant reading for investors in JCP stock.
JCP has recently announced that it will be taking on the services of debt restructuring specialists Kirkland & Ellis and Lazard as the company attempts to turn its fortunes around. “The firms, which had no comment, have worked on significant workouts with other retailers, including on a debt restructuring earlier this year for luxury clothier Neiman Marcus Group Ltd executed without the need for a bankruptcy filing.”
JCP stock has lost over 70% of its value this year, from a March peak of $1.85.
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