J.C. Penney Co. Inc.’s stock fell 19.7 percent to $26.75 Wednesday as investors balked at the company’s $163 million first-quarter loss and the elimination of its dividend.
That’s the stock’s worst day in more than 30 years of trading.
A day earlier, chief executive officer Ron Johnson had acknowledged that his turnaround efforts took a greater financial toll than expected, but maintained that his reinvention of the massive chain was ahead of schedule. In addition to switching up the company’s pricing model and eliminating coupons, the rejiggering is setting the company on a more fashionable path, with looks from Marchesa’s Georgina Chapman and William Rast set to be added.
Also logging a dramatic decline in its share price Wednesday was Abercrombie & Fitch Co., which fell 13 percent to $39.50 after reporting a drop in first-quarter profits and weakness in Europe.
Abercrombie’s net income dwindled to $3 million, or 3 cents a diluted share, from $25.1 million, or 27 cents, a year earlier. And sales for the three months ended April 28 rose 10.1 percent to $921.2 million from $836.7 million on a 5 percent comparable-store sales drop.
“While we are disappointed that European sales trends remain challenging in a very difficult macroeconomic environment, we are largely satisfied with our overall performance for the quarter in that context,” said Mike Jeffries, chairman and ceo of Abercrombie.
“Our U.S. business, including direct-to-consumer, increased 4 percent on a comparable basis, on top of a strong performance last year,” he said. “Our international business comped negatively, but the economics remain strong and we delivered overall international sales growth of 42 percent including a strong performance in direct-to-consumer.”
For the full year, Abercrombie continues to project earnings per share of $3.50 to $3.75. Same-store sales are now projected to drop by a percentage in the midsingle digits.
Limited Brands Inc. late Wednesday exceeded analysts’ expectations for first-quarter earnings but projected second-quarter results below Wall Street’s view.
Net income declined 24.6 percent to $124.6 million, or 41 cents a share, 1 cent above the consensus estimate, from $165.2 million, or 50 cents, in the 2011 quarter. Excluding nonrecurring items, year-ago EPS was 40 cents.
Sales in the quarter pulled back 2.9 percent to $2.15 billion from $2.22 billion and rose 7 percent on a same-store basis. Eliminating $214 million in year-ago sales from a sourcing business sold in November, sales were up 7.5 percent.
Limited, which will hold a conference call today, projected second-quarter EPS of 40 to 45 cents, below the current 50-cent analyst estimate. The top of its full-year guidance for EPS of $2.63 to $2.83 matched Wall Street’s expectations. Shares retreated 3.6 percent in the first hour of after-hours trading, to $46.25, after closing at $47.96, down 9 cents, or 0.2 percent.
Additionally, Chico’s FAS Inc. said first-quarter profits rose 16.8 percent to $53.6 million, or 32 cents a diluted share, from $45.9 million, or 26 cents, a year earlier. Sales for the three months ended April 28 jumped 21.2 percent to $650.8 million from $537.2 million.
This year, the company is looking for comps to grow at a midsingle-digit clip. Investors pushed the retailer’s stock up 3.8 percent to $15.21.
The overall market was caught in the doldrums Wednesday, with the S&P Retail Index slipping 0.1 percent, or 0.89 points, to 615.12, as the Dow Jones Industrial Average dipped 0.3 percent, or 33.45 points, to 12,598.55.
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)
@Pharrell and his wife Helen Lasichanh were among the stars that came out to celebrate @rimowa’s first pop-up concept shop. The space, which is located on Rodeo Drive in Beverly Hills, draws inspiration from airport luggage carousels and lounge areas – and features the company’s luggage and accessories. If the pop-up is successful it could pave the way for addition temporary shops throughout the world. #wwdfashion (📷: Owen Kolasinski/BFA)
@carineroitfeld celebrated @crfashionbook’s first calendar last night with a dinner party at Spring Place in Manhattan. Photographed by @stevenkleinstudio, the calendar takes on a fitness theme and features @joansmalls, @gigihadid, @danielle_herrington_ – pictured here – and more. “[Carine Roitfeld] wanted me to feel sexy and she wanted me to be myself and feel it out on my own and do what I felt was right,” said Herrington, aka Miss October. #wwdeye
@saintrecords and @virgilabloh last night at @americanexpress’ “A Night With Success Makers” event. “I always bring it back to community because without that I wouldn’t have the courage,” said Knowles when asked how she has gotten where she is now. Read more highlights from their conversation on WWD.com. #wwdeye (📷: @lizdoupnik)
This Just In: Industry sources have told WWD that Anastasia Soare is rumored to be considering selling her beauty business, @anastasiabeverlyhills. According to those sources, Soare has tapped investment bank Imperial Capital to explore sale options for her eponymous beauty brand –– and with at least $340 million in net sales, this would be a big deal. Put in context of other recent transactions for makeup companies, Soare’s price tag could be in the billions if she were to sell the whole thing. #wwdnews #wwdbeauty (📷: @clint_spaulding)
@assouline’s latest book, “The Spirit of Bentley: Be Extraordinary” captures the adventurous attitudes and opulent lifestyles of @bentleymotors’ most creative owners and enthusiasts throughout the U.K. The 292-page hardcover has a section dedicated to showing its team of skilled artisans and photos of its most colorful owners, from George Bamford to designer @alicetemperley, pictured here by Aline Coquelle. #wwdeye
@google released its report on the most popular search terms this year. For fashion brands, the list was led by @gucci, the luxury brand that stunned the market last October when it pledged to stop using fur. Runner ups were @supremenewyork and @fashionnova, along with more established brands like @louisvuitton, @chanelofficial and @ysl. #wwdfashion (📷: @aitorrosasphoto)
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)