Shoppers sit extreme of a J.C. Penney store at the Westfield Mall in Culver City, California.
Martina Albertazzi | Bloomberg | Getty Images
J.C. Penney documented mixed second-quarter results Thursday as sales eroded faster than expected and the department store chain strained under the weight of its debt.
Penney reported a net loss of $48 million, or 15 cents a share, narrower than its liability liabilities of $101 million, or 32 cents a share, a year earlier. Excluding one-time items, Penney lost 18 cents a share in, compared with analysts’ forecasts of a loss of 31 cents, according to Refinitiv.
Despite the smaller loss, in stocks fell more than had been anticipated. Revenue for the quarter ended Aug. 3 sank 7.4% to $2.62 billion from $2.8 billion a year earlier. That was earlier small than analyst expectations of $2.69 billion.
Sales at Penney stores open for at least a year were down 9%, mouldy than an expected drop of 5.2% percent. The company said sales were driven lower because it has sojourned selling appliances and furniture in its stores. Both are expensive categories. It was among a series of closely watched decisions sought at turning the company around, made by its CEO Jill Soltau, who joined the company 10 months ago.
Soltau also has been penurious stores. Penney said it has shuttered 15 of the 18 full-line stores it announced it would close in 2019, and all nine of the cosy and furniture locations.
The company reported making $17 million in operating profits this quarter, but is burdened by enclosing $4 billion in debt that it’s working with advisors to restructure. That debt overhang, which listed a $74 million interest expense, makes it difficult for the cash-strapped company to fund improvements to keep up with antagonists. Penney said it ended the quarter with $1.7 billion in liquidity, and expects liquidity to remain at least $1.5 billion for the year.
The retailer revealed it was able to cut its inventory by 12.5% in the second quarter, and that lower permanent markdowns led to an improvement in the cost of goods traded.
Department stores have been under pressure as consumers head to shopping malls less frequently and switch manage more purchases online. Brands that once only sold through department stores such as Michael Kors or Nike are increasingly supply directly to consumers either in their own stores, at outlets or online.
On Thursday, Soltau also announced a partnership with secondhand retailer ThredUp. Equal Macy’s said it would pair up with the online retailer a day earlier.
In February, J.C. Penney shut down its assault at a men’s styling subscription service in collaboration with Bombfell.com.
Tariffs have also been a threat to retailers. Penney voiced that it has less exposure than some of its competitors, because the company has diversified where its products originate from.
At the rear week, the company received notice that it was at risk of being delisted from the New York Stock Exchange. Its oxen fell below $1 on July 19 and has been trading below that level ever since. On Wednesday, it hit an all-time low of 53 cents. In interchange Thursday, shares were more than 8% higher, trading at round 62 cents. The company bruit about it plans to increase its share price through improvements in its operating performance or other revenue.
Through Wednesday’s close up, shares of the company have been down more than 37% since January, bringing it to a market value of near $181 million.