JCPenney Reports Loss Due to Restructuring

J. C. Penney Company Inc. (NYSE:JCP), the holding company operating retail chain across the United States said in a statement earlier today that the company has suffered from the recent restructuring charges and pullback of its customers which have led to losses in the fiscal third quarter.

The outlook for the fourth quarter also does not look bright as the company fails to meet the expectations of Wall Street analyst.

According to the Executive Chairman of J. C. Penney Myron Ullman, the company’s affluent and elite customers continue to patronize and respond to various J. C. Penney’s attractions where as the moderate customers still have a limited discretionary spending capabilities which were quite visible in the current quarter and the addition of this economic slowdown has also affected the sales especially in the basic items segment as people are deferring from making non-necessary purchases.

The shares of J. C. Penney fell by around 2.5 percent to $33.10per share in the premarket trading. The company reported a loss of about 67 cents per share or $143 million. The company has also experienced a decline in sales by 4.8 percent to $3.99 billion after J. C. Penny exited from catalog and catalog outlet businesses.

The holiday season sales are not up to the expectations and the company’s forecast stays less than that of its counterparts   which may further decline the growth margin. The current scenario in addition to the losing consumer base increases the pressure on the current chief executive officer Ron Johnson who formerly used to work for Apple Inc. (NASDAQ:AAPL) and was behind the  launch and expansion  of Apple Stores.

The same store sales had been falling and missing the forecasts every month during the third quarter and the same store sales for the quarter was down by 1.6 percent as compared to the forecasted increase of 2 to 3 percent.  Unlike J. C. Penney, its  rival Kohl’s Corporation (NYSE:KSS) reported same store gains for the third quarter after featuring high profile exclusive merchandise lines by Marc Anthony and Jennifer Lopez.

The fourth quarter profit forecast by J. C. Penney stands between 64 cents and 74 cents per share inclusive of restructuring charges which is less than the average estimate of over a dollar made by analysts. The company said that it expects the sales in its stores which have been open for a year or more to remain stable or slightly positive in spite of the shrinking total sales.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.