J.C. Penney blamed weak clothing sales on bad spring weather and said it would offer more plus-size fashions to try and boost sales.
The company also cut its earnings outlook for the year and its stock tumbled 14 percent Thursday.
Penney said the cool weather hurt sales of its kids and women’s clothing. Sales of its men’s clothing, however, rose as it increased its big and tall selection. It recently hired former basketball player Shaquille O’Neal to hawk its bigger sizes in commercials and plans to launch a fashion brand under O’Neal’s name. CEO Marvin Ellison said Thursday that special sizes are the company’s “greatest opportunity for growth,” and it is looking to add to its women’s plus-size assortment.
During the first quarter, the company’s sales rose 0.2 percent at established stores, nowhere near the 2.1 percent growth analysts expected, according to FactSet.
Penney’s weak results come a day after rival Macy’s reported a strong first quarter as it increased its store label brands. Neil Saunders of GlobalData Retail said Penney’s woes may have more to do with increased competition and lackluster fashions, rather than the weather.
“The biggest problems for JCP are relevance and profile,” Saunders said, adding that Penney is not standing out among a “sea of competing products and concepts.”
Penney reported a loss of $78 million, or 25 cents per share, for the three months ended April 5. Adjusted for one-time items, the loss was 22 cents per share, matching what analysts expected.
Revenue fell 4.1 percent to $2.67 billion, beating projections of $2.6 billion, according to a survey by Zacks Investment Research.
The Plano, Texas-based company now expects full-year results to range from a loss of 7 cents per share to earnings of 13 cents per share. It previously forecast a potential profit range of 5 cents to 25 cents per share. Analysts expect 16 cents per share, according to FactSet.
Shares of J.C. Penney Co. fell 42 cents to $2.65 in afternoon trading.
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