Shortly after reporting its first-quarter earnings, J.C. Penney saw the departure of its CEO Marvin Ellison, who left to take up a position with Lowe’s Companies (LOW). The disappointing results and the abrupt CEO exit took its toll on the stock, which tumbled 12% after the earnings release and 5% after the CEO departure.
J.C. Penney has been struggling in a retail environment that is facing fierce competition from online retailer Amazon (AMZN). The company has been trying to lift its profits through cost-cutting and store closures. J.C. Penney has also been making improvements to its home and beauty categories, which include opening several new Sephora stores and adding new brands and products.
J.C. Penney sees good opportunity in the baby care market and is adding more products to its baby care assortment
Earlier this month, J.C. Penney said it was opening close to 500 stores in the vicinity of the erstwhile Babies R Us stores, a move seen as an effort to capitalize on the latter’s store closures. J.C. Penney said it sees good opportunity in the baby care market and is adding more products to its baby care assortment.
Taking all factors into consideration, it can be assumed that J.C. Penney might see some benefits from the strategic efforts it is taking, but these might not be enough to bring about a significant turnaround in the results for this quarter. The stock dropped 11% during early morning hours.
J.C. Penney’s rival Macy’s Inc. (M) reported its second-quarter results today and even though Macy’s beat market estimates on sales and earnings, its stock dropped more than 14% in early trading. The trade war is said to be walloping retailers with commodity prices and tariffs. Shares of several retailers fell, with Nordstrom (JWN) dropping more than 6% and Kohl’s Corp. (KSS) slumping more than 7%. Even Amazon took a hit by more than 2%.
Related: JC Penney falls to record lows as CEO Marvin Ellison quits to head up Lowe’s
Related: JC Penney Q1 2018 Earnings Infographic
