Economy

JC Penney Shares Fall due to huge Markdowns

JC Penney Shares Fall due to huge Markdowns”

But what unnerved investors was the deeper than expected adjust loss for the quarter of 40 to 45 cents that Penney expects to report, far worse than analysts' average estimate of 18 cents, according to Thomson Reuters I/B/E/S.

Like many department stores, J.C. Penney has tried to reinvent itself as American spending patterns change radically.

J.C. Penney shares plunged 24 percent on Friday after the USA department store chain slashed its 2017 profit and comparable sales forecasts as it sold stagnant inventory at heavy discounts ahead of a holiday-season refresh.

The culprit was heavy discounting in Penney's apparel lines, particularly for women's apparel. That was a huge setback for Penney, as it had been attempting to rejuvenate this part of the business.

CEO Marvin Ellison said in a statement that the retailer decided, after seeing positive initial results, to accelerate "a wider transformation of the entire women's department by clearing slow-moving inventory, primarily in women's and other apparel categories". Chief Financial Officer Jeffrey Davis will try to improve the company's pricing and planning policies as well to improve predictive analytics.

Additionally, J.C. Penney officials also said yearly comparable stores sales will be flat to down 1%, with adjusted earnings per share anticipated to be up between $0.02 and $0.08.

J.C. Penney Co. Inc.'s third-quarter and full-year profit warning brought shares down more than 26% in Friday premarket trading, dragging down the stock of fellow department-store chains Macy's Inc. and Kohl's Corp. with it.



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