J. C. Penney Co. Inc. shares dropped more than 10% in premarket trading on May 21 as the retailer posted fiscal first-quarter losses that came in worse than analysts expected.
The Plano, Texas-based department store chain posted adjusted net loss per share for the three months ended May 4 of 46 cents, compared to an adjusted net loss of 22 cents per share in the same quarter of 2018 and above the S&P Global Market Intelligence mean consensus analyst estimate for normalized net loss per share of 39 cents.
Adjusted net loss for the quarter came in at $147 million, an increase from a $69 million adjusted net loss in the year-ago period. Analysts expected J.C. Penney to post a net loss excluding exceptions of $123.9 million for the quarter, according to Market Intelligence.
Net sales declined 5.6% year over year to $2.44 billion. The company stopped selling major appliances on Feb. 28 and dropped most in-store furniture sales at the same time. The moves caused a hit of 20 basis points to comparable sales and a 70 basis point hit to the cost of goods sold for the quarter that was partially offset by an improvement in non-clearance selling margins, J.C. Penney said.
J.C. Penney's inventory at the end of the quarter was $2.48 billion, 16% lower than the end of the first quarter of fiscal 2018. The company aims to "reduce and enhance" its inventory position, CEO Jill Soltau said in a statement.
For fiscal 2019, J.C. Penney continues to expect positive free cash flow for the year, though the company did not offer earnings expectations. Executives in February said leadership changes were behind the decision to withhold guidance for the year.
Shares in J.C. Penney dropped 10.43%, or 12 cents, in early trading May 21 to $1.03. The retailer reported earnings before U.S. markets opened.