J.C. Penney reaffirms free cash flow forecast, plans store closures
today Jan 9, 2019
Department store operator J.C. Penney Co Inc on Tuesday reaffirmed its 2018 free cash flow forecast and said it expects to end the year with liquidity in excess of $2 billion.
Penney also announced plans to close three stores this spring and said it would assess locations over the next few months that may not meet the required financial targets or represent a market opportunity.
The company said it would provide more details on future store closures when it reports its quarterly earnings on Feb. 28.
Penney, which currently operates 860 stores, had announced closure of 138 stores in February 2017.
The latest store closures come as Chief Executive Officer Jill Soltau, who took office in October, looks to turn around the troubled company that has seen sales declining in the past two years.
Penney’s shares, which had lost 67 percent in 2018, were up 3.3 percent in after-hours trading.
The Plano, Texas-based company on Tuesday reported a 3.5 percent fall in adjusted comparable store sales for the nine-week period ended Jan. 5, indicating a fall in overall comparable sales for the holiday quarter.
Penney’s results underscored the brick-and-mortar retail industry’s struggles to win back shoppers who have been increasingly shifting towards online retailers such as Amazon.com and fast-fashion brands.
A handful of major U.S. retail names have collapsed in the past two years, including Sears Holdings Corp, which is now considering a revised takeover bid from billionaire Chairman Edward Lampert temporarily staving off a liquidation.
Penney and other retailers, on the other hand, have slashed jobs and closed hundreds of stores.
Analysts have noted that retailers like J.C Penney, Kohl’s Corp, Macy’s Inc and Walmart Inc could benefit from Sears shuttering stores.
© Thomson Reuters 2019 All rights reserved.