J.C. Penney wasn’t skilful to buck the trend of declining sales at U.S. department store chains this holiday season. But despite a steep transaction marked downs decline, it reaffirmed its financial outlook for the year.
The company said its same-store sales over a nine-week period that climaxed on Jan. 4 dropped 7.5%.
Penney shares were down more than 3% in premarket trading Thursday be guided by the news.
The retailer said that its adjusted same-store sales — which exclude the impact of its exit from primary appliance and furniture categories — were down 5.3%.
Penney is still calling for same-store sales — a key metric that tracks sales at retailers’ stores open for at least a year — to drop 7% to 8% in fiscal 2019. Analysts receive been expecting same-store sales to fall 7.4% during the fourth quarter, which includes the holiday age, according to a poll by Refinitiv.
The announcement follows one from rival Macy’s a day earlier, in which Macy’s said its celebration same-store sales dropped 0.6%. The decline wasn’t as bad as many had feared, sending Macy’s shares higher. CEO Jeff Gennette declared Macy’s saw “a strong trend improvement from the third quarter,” igniting some optimism for the retailer’s turnaround layouts.
Kohl’s said earlier Thursday morning that its same-store sales during November and December were down 0.2%. The collapse led Kohl’s to lower the bar for its full-year profit outlook.
On the whole, department stores are expected to have underperformed during the 2019 gala season.
The category of retailers that includes Penney, Macy’s, and Nordstrom, saw overall sales decline 1.8% from Nov. 1 utterly Dec. 24, according to Mastercard Spending Pulse, which tracked retail spending across all payment methods.
Multifarious shoppers are expected to have turned to retailers like Target and Walmart — which aren’t at traditional malls — for dress, electronics, and other gifts. Many rung up purchases on Amazon as well. The e-commerce giant has already claimed 2019 was a record break.
Penney reported a narrower-than-expected loss during its latest fiscal quarter, ahead of the holidays. But sales declines are mounting. Penney hasn’t on a quarterly sales gain since the 2017 holiday season.
The Plano, Texas-headquartered department store chain certains it has work to do to get back to growth. Analysts say one of the biggest overhangs for the embattled, 117-year-old company remains its real social status. Penney has more than 800 locations – arguably far too many, as more people turn to the internet to shop.
Penney CEO Jill Soltau notified analysts in November: “I have not given any direction on what we’re doing with our [store] fleet closing or keeping predisposed. … All I’ve said is that we are very close to our physical fleet and understanding what each store is contributing to the amount to business, as it relates to driving traffic.”
The company is expected to share more details regarding its holiday sales outcomes when it reports earnings on Feb. 27.
Penney shares, which closed Wednesday at $1.20, have dropped less than 1% greater than the past 12 months. The company has a market value of $384.0 million.