Weak Same-Store Sales and Larger Net Loss Send J.C. Penney Stock Down More Than 11% Tuesday Morning

What happened

Shares of J.C. Penney (NYSE: JCP) dropped as much as 11.3% Tuesday morning after the retailer released a disappointing first-quarter report that included weak same-store sales and a net loss that nearly doubled. As of 12:40 p.m. EDT, the stock was down 7.8%.

So what

Total revenue decreased 4.3% to $2.56 billion, in line with analysts' estimates, but same-store sales -- data from stores that have been open for at least 12 months -- fell 5.5% during the first quarter. That same-store sales drop marked the company's sixth straight quarterly decline and was worse than analysts' estimates calling for a 4.21% decrease. J.C. Penney's net loss almost doubled to $154 million, or $0.48 per share, and when adjusted for one-time items, its loss of $0.46 per share was worse than analysts' estimates of a $0.38-per-share loss.

A woman inspecting clothes on a retailer rack.

Image source: Getty Images.

CEO Jill Soltau reiterated that the turnaround plan is focused on meeting consumer demands. "We are working to reestablish the fundamentals of retail at JCPenney, and at the same time, we are building capabilities to satisfy the wants and expectations of our customers. In everything we do, we are putting the customer at the center," Soltau said in the press release.

Now what

The harsh truth is that J.C. Penney is currently a weak operator in an intensely competitive industry, and the stock's 86% decline over the past three years reflects its struggle to turn its business around. Management is committed to drawing up a comprehensive long-term strategy, which it plans to unveil in the coming months, and the company continues to put together a talented team of retail experts to help accomplish its long-term goals, but serious headwinds, risks, and challenges remain.

10 stocks we like better than J.C. Penney
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and J.C. Penney wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More