Sales continued to fall in Q1
JCPenney (JCP) delivered yet another quarter of disappointing results when it announced its performance for the first quarter of fiscal 2019 today. The quarter ended on May 4. JCPenney’s fiscal first-quarter revenue—which comprises net sales and other income—fell 4.3% to $2.56 billion, in line with analysts’ forecasts. JCPenney stock was down 7.0% as of 2:10 PM today.
The company’s same-store sales fell 5.5 % for the quarter. Rival Kohl’s (KSS), which also announced its results today, reported a 3.4% fall in its first-quarter same-store sales.
JCPenney’s decision to exit the major appliance and in-store furniture categories hurt its first-quarter same-store sales growth by 20 basis points. The company recorded positive results in the fine jewelry and children’s, women, and men’s apparel categories in the first quarter.
Not much hope for improvement
JCPenney reported an adjusted loss per share of $0.46 in the first quarter against analysts’ forecast of an adjusted loss per share of $0.38. JCPenney’s losses widened significantly compared to its adjusted loss per share of $0.22 in the first quarter of fiscal 2018.
The company didn’t provide any specific guidance for sales and earnings for fiscal 2019, but it reiterated that it expects to generate positive free cash flow this fiscal year.
JCPenney CEO Jill Soltau is trying to revive the company through better inventory management, existing lower-margin categories like appliances, and stronger omnichannel capabilities. The company launched a new store checkout process in the first quarter. JCPenney also tested a centralized pickup and returns area concept, and it plans to roll out this feature to 500 stores in the second quarter.
JCPenney is somewhat unable to connect with customers amid intense competition from online retailers and even compelling bargain deals from off-price retailers. An uncertain macro environment and the US-China trade war are likely to make JCPenney’s turnaround more difficult.