J.C. Penney a case of 'good results, bad timing' as shares plunge
By Sruthi Ramakrishnan
(Reuters) - J.C. Penney Co Inc (JCP.N: Quote) reported better-than-expected quarterly net sales and a smaller-than-expected loss, helped by demand for home products and footwear and a strong performance by the growing number of Sephora beauty shops in its stores.
But the company's shares dropped as much as 18 percent on Friday, highlighting growing concerns about consumer spending.
Data on Friday showed that U.S. retail sales rose just 0.1 percent in October, less than expected, suggesting a slowdown in consumer spending that could dampen expectations of a strong pickup in economic growth in the quarter.
Deutsche Bank analyst Paul Trussell summed up J.C. Penney's quarter as "good results, but bad timing."
Penney's results capped a volatile week for U.S. department stores ahead of the all-important holiday shopping season, a period that historically has accounted for about a third of their annual sales and almost 40 percent of earnings.
Macy's Inc M.N and Nordstrom Inc (JWN.N: Quote), whose customers tend to be more affluent than Penney's, both cut their full-year forecasts this week after reporting disappointing results.
However, Kohl's Corp (KSS.N: Quote), which competes more closely for the same shoppers as Penney, reported better-than-expected profit and sales.
Penney maintained its same-store sales forecast for the year despite reporting on Wednesday that its comparable store sales in the quarter were the best in over nine years. Continued...