J.C. Penney cuts sales forecast after poor third quarter, shares dive

J.C. Penney Co Inc cut its forecast for annual sales on Thursday while also withdrawing its outlook for full-year earnings, adding to nerves over the future of another one of America’s best known retail names.

Shares in the company dropped nearly 12 percent to $1.10 in premarket trade after the department store chain’s same-store sales in the third quarter fell well short of Wall Street estimates.

J.C. Penney has for years struggled to excite consumers with its mid-priced range of apparel as they increasingly prefer fast-fashion brands and shop online.

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The Plano, Texas-based company said sales at stores open for at least 12 months fell 5.4 percent in the three months ended Nov. 3. Wall Street analysts on average had expected a 0.61 percent decline, according to IBES data from Refinitiv.

“While restoring JCPenney to sustained profitable growth will be a lengthy process, I understand the need for quick action,” said Jill Soltau, the retailer’s newly appointed chief executive officer.

The company now expects comparable-store sales for fiscal 2018 to fall in the low single digits, compacted with an earlier projection of sales being unchanged year-over-year.

J.C. Penney withdrew its annual earnings forecast, to give its new chief executive officer and interim chief financial officer more time to assess the business.

Its quarterly net loss widened to $151 million, from $125 million a year earlier.