J.C. Penney’s woes continue.
The ailing department store chain announced today that its comparable store sales for the holiday season—the combined nine-week period ending Jan. 4—decreased 7.5%. Adjusted comparable store sales, excluding the impact of the company’s recent exit from major appliance and in-store furniture categories, decreased 5.3%.
In response, the company’s stock fell 3.3% in Thursday’s premarket trading.
The retailer has been hanging on by its fingernails for years. In August 2019, it was even in danger of being delisted from the New York Stock Exchange for noncompliance with the exchange’s minimum average share price listing requirement (the company’s stock is down 10.5% over the past year).
The danger was ultimately averted. In a Dec. 2 filing with the Securities and Exchange Commission, J.C. Penney notified shareholders that it no longer faced the threat of being delisted, JCK news director Rob Bates reported in December.
The company reaffirmed its financial guidance this morning for the full fiscal year 2019. Comparable store sales are expected to be in a range of 7%–8% and adjusted comparable store sales in the range of 5%–6%. The company will report its fourth quarter and fiscal 2019 results on Feb. 27.
But is a real turnaround possible?
Financial news site The Motley Fool wondered this morning if Penney’s can survive the coming decade, considering it has more than $3 billion in debt soon due, with roughly $2.5 billion scheduled between 2022 and 2023. As consumers increasingly turn to Amazon and the like for their low-to-mid-priced merchandise needs, forgoing the mall and department store experience in favor of online shopping, it’s a fair question. Add to that a potential economic downturn in the United States, which is pure conjecture at this point, and Penney’s chances of returning to vibrancy further wane.
J.C. Penney Co. Inc. operates approximately 850 stores across the United States and Puerto Rico.
(Photo courtesy of J.C. Penney Co. Inc.)
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