JCP stock is tanking today after JC Penney (NYSE:JCP) reported a 7.5% decline in comparable same-store sales for the nine-week period ended January 4, traditionally the busiest time for retailers.
Falling Holiday Sales Weigh on JCP Stock
The Texas-based retail chain reported adjusted same-store sales, which exclude the impact of the firm’s exit from the appliance and furniture categories, fell by 5.3% over the holiday season. While analysts had been expecting the key retail metric to fall as much as did, particularly amid the increasing dominance of e-commerce of traditional brick-and-mortar stores, JCP stock is still trading down over 17% as speculators weigh up the long-term future of the struggling chain store.
However, executives at JC Penney have maintained the firm’s guidance for fiscal 2019, expecting comparable same-store sales to fall between 7% and 8%. While JCP stock may be tanking badly today, some analysts remain bullish on the success of the company’s turnaround efforts in recent months, with Zacks maintaining its ‘Hold’ rating on the stock, citing the launch of a brand-defining store in Hurst, Texas. That store will trial a new format that will include a yoga studio and videogame lounge.
Turnaround Strategy Stutters
JC Penney has been busy implementing a turnaround strategy in recent months, which actually saw JCP stock make some sizeable gains in the latter half of 2019 following almost over three years of steady declines. Disappointing quarterly results further accentuated JC Penney’s problems and led to the New York Stock Exchange handing the firm a delisting warning for trading below $1.00 for 30 consecutive days.
However, the company’s most recent earnings statement in November showed some sign of life for JC Penney. Extensive store revamps, ditching underperforming businesses, and narrower-than-expected losses led to JCP stock rocketing almost 180% in the last four months of the year. Regardless of its turnaround efforts, today’s publication of the company’s seasonal performance is a major blow and highlights that the future remains bleak for traditional retailers in the face of e-commerce.
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