J.C. Penney Company Inc. (NYSE: JCP) surpassed market estimates on revenue for the first quarter of 2019 but reported a wider-than-expected loss, sending shares tumbling 8.7% in premarket hours on Tuesday.
Total revenues were $2.55 billion, down 4.3% compared to the year-ago quarter. Net sales fell 5.6% year-over-year to $2.43 billion.
Comparable sales decreased 5.5%. The exit of the major appliances and in-store furniture categories had a combined negative impact of 20 basis points to comparable sales in the quarter. During the quarter, the company saw strength in its apparel and fine jewelry categories.
Net loss widened to $154 million, or $0.48 per share, compared with $78 million, or $0.25 per share, in the prior-year period. Adjusted net loss was $147 million, or $0.46 per share.
“As our inventory rationalization effort continues, we are testing a number of strategies around optimal inventory levels and assortment choice counts with a goal of delivering an improved experience for our customers and maximizing our return on investment,” said Jill Soltau, Chief Executive Officer of J.C. Penney.
At quarter-end, inventory was $2.48 billion, down 16% versus the year-ago period. Liquidity totaled approx. $1.75 billion while cash and cash equivalents were $171 million.
The company currently expects free cash flow to be positive for fiscal year 2019.
In a separate release, J.C. Penney announced the appointment of Shawn Gensch as Executive Vice President and Chief Customer Officer, effective June 3, reporting directly to CEO Jill Soltau.
Gensch joins J.C. Penney from Sprouts Farmers Market. He will oversee all aspects of the company’s marketing strategies and initiatives including digital, advertising, creative design and customer research.