JCPenney Stock Plummets as Investors Lose Faith in the Retailer’s Turnaround Efforts

J. C. Penney Company Inc.’s fourth-quarter earnings trounced analysts’ expectations — but it was not enough to mollify investors, who appear to have lost faith in the retailer’s ability to turn around its business.

As of 10:30 a.m. ET, the Plano, Texas-based firm’s stock was down more than 10% to 65 cents. It posted adjusted earnings per share of 13 cents — versus Wall Street’s anticipated loss of 6 cents — on profits of $43 million, compared with last year’s $57 million. Revenues, however, decreased 7.7% to $3.38 billion, versus consensus bets of $3.44 billion.

The retailer has struggled for several quarters with declining sales, leadership changes and digital competition that spooked investors and pushed its stock below $1 — putting it at risk of being delisted from the New York Stock Exchange.

JCPenney also expects further sales declines and store closures this year: Today, it announced that it would shutter at least six of its outposts in 2020. It also anticipates a drop in full-year comps in the range of 3.5% to 4.5%.

Since taking the helm in October 2018, CEO Jill Soltau has shut down underperforming stores and hired new talent to revive the business. The company also hired debt restructuring advisers in mid-July as part of its turnaround plan.

Further, JCPenney recently doubled down on its women’s business, relaunching the in-house A.n.a label with a fresh focus on size-inclusive denim. It also partnered with ThredUp in August to offer the online consignment firm’s secondhand apparel and accessories at 30 of its stores.

“I am encouraged by our progress, especially in our women’s apparel businesses,” CEO Jill Soltau said today. “We knew it would take time to restore discipline and return growth to JCPenney.”

Last week, JCPenney made the S&P Global Market Intelligence’s “most vulnerable” publicly traded retailers list. It also saw yesterday the departure of Shawn Gensch as EVP and chief customer officer after just nine months on the job.

(Editor’s Note: An earlier version of this article inaccurately stated that Jill Soltau became JCPenney’s CEO in October 2017.)

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