PLANO, Texas - JC Penney (JCP) narrowed its third-quarter loss but reported slower sales, a note of warning with the critical holiday shopping season coming up. Investors reacted swiftly, pushing Penney's shares down 48 cents, or 6.2 percent, in extended trading.
The department store chain said Wednesday that revenue from its stores open at least a year, a key retail metric, was flat, following gains in the three prior quarters.
The results show some encouraging signs for the Plano, Texas-based retailer as it tries to recover from a disastrous attempt to reinvent itself. But it may still have struggles ahead, given the slower sales momentum heading into the holiday shopping season.
Penney lost $188 million, or 62 cents per share, in the most recent quarter. It lost 77 cents per share on an adjusted basis, topping Wall Street expectations, where the average estimate of analysts surveyed by Zacks Investment Research was for a loss of 83 cents per share.
Last year, the company lost $489 million, or $1.94 per share, for its fiscal third quarter, or $1.81 per share on an adjusted basis.
Penney's revenue slipped slightly to $2.76 billion from $2.78 billion, missing Street forecasts of $2.82 billion, according to Zacks.
The results come a month after Penney named Marvin Ellison as its next president and CEO. Ellison, a former executive with Home Depot (HD), started earlier this month and will take over CEO Mike Ullman's job in August.
Ullman, a former Penney CEO, came out of retirement last year to stabilize the business after Ron Johnson was ousted. Johnson had tried unsuccessfully to reinvent the chain by getting rid of most sales and some basic merchandise. That led to billions in losses of profit and sales and it has been a tough recovery since.
Ullman has been trying to win back shoppers by restoring discounts and basic merchandise.
The company also overhauled its home area to refocus on more traditional brands after Johnson's strategy of trendy merchandise flopped. Penney has returned to its focus on home categories, instead of featuring mini shops devoted to a particularly brand.
Last month, it unveiled a strategy at its analysts' meeting to improve productivity, expand e-commerce and spruce up some departments that it said would boost sales by $2.55 billion over the next three years.
Penney sees the opportunity for an additional $1 billion in sales from continued market-share growth. That would bring the chain's annual revenue to $14.5 billion by fiscal 2017 -- still well below the $17.23 billion it generated before sales went into a freefall under Johnson.
JCP shares closed regular trading on Wednesday at $7.76, up nearly 7 percent on the day, but still down about 7 percent in the past 12 months.