Good Morning
Good Morning

J.C. Penney quarterly sales up, but shares drop

J.C. Penney released encouraging sales news yesterday after

J.C. Penney released encouraging sales news yesterday after shares for the department store chain have been battered by investors’ pessimism that it can recover from a steep sales slump. Above: A customer leaves a J.C. Penney store in Manhattan on April 9, 2013. Credit: AP / Mark Lennihan

The first quarterly increase in two years for comparable-store sales at J.C. Penney was not enough to win over Wall Street, which punished the retailer's shares Tuesday.

The company's stock plunged 10.56 percent to close at $5.08.

Same-store sales rose 2 percent during the November-January quarter, which was less than the 4.2 percent increase that analysts had expected, according to FactSet estimates.

During the nine-week holiday period in November and December, same-store sales rose 3.1 percent. The holiday season can account for 20 percent to 40 percent of a retailer's annual sales.

Same-store sales are considered a key measure of a retailer's heath because the metric strips away the volatility associated with stores that have recently opened or closed.

It was a brutal holiday season not only for J.C. Penney, but for almost the entire retail sector. The slow economic recovery, a stubbornly high unemployment rate and fierce competition from online retailers like forced traditional retailers to discount heavily just to get people through the door.

Heavy winter storms raking the United States in January have weighed on post-holiday sales.

Tuesday, the company said that it ended 2013 with more than $2 billion in total available liquidity. That was in line with most estimates but far from healthy for a company that recently posted its seventh consecutive quarter of big losses.

-- AP

More news