Mark J.C. Penney Co. Inc. as the latest retailer to acknowledge that Christmas wasn’t too cheery — with blenders outperforming blouses.
The retailer said comparable sales for November and December combined fell 0.8 percent — well below the 3 percent gain analysts projected. Macy’s Inc., Kohl’s Corp. and others suffered similar weakness on the sales front. But Penney’s at least reaffirmed its full-year target of $1 billion in earnings before interest, taxes, depreciation and amortization.
Investors pushed the stock down 3.7 percent to $7.57.
“The first three weeks of November proved to be challenging in stores, consistent with the trends in the broader retail industry,” said Marvin Ellison, chairman and chief executive officer. “However, the business improved and overall comp sales for the six-week period from Thanksgiving week through the end of December were positive.
“During the holiday season we saw strength in appliances, outerwear, boots, toys, Sephora and fine jewelry,” he said. “However, weakness in women’s apparel continued to impact our performance. We are also encouraged by a very strong performance in our e-commerce business, evidenced by double-digit growth. This validates the strength of our omnichannel strategy as efforts to improve site functionality, expand fulfillment capabilities, offer flexible shipping options and introduce a broad assortment of new product categories were instrumental to this digital sales growth.”
Ellison asserted that the company’s turnaround “remains on track.”
Oliver Chen, an analyst at Cowen, said the company’s holiday sales were “were reflective of the overall industry dynamic, as results were similar in many respects” to Kohl’s and Macy’s.
“All three retailers struggled with volatile sales and a slow start to the holiday season as well as evolving consumer preferences,” Chen said. “We were pleased to see both Macy’s and J.C. Penney management point to strong e-com sales growth with both retailers embracing their digital businesses.”
While Penney’s went through a period of dramatic cuts following a failed reinvention spearheaded by Ron Johnson, Macy’s is in some ways catching up to that now and is laying off more than 10,000 workers, roughly 7 percent of its workforce, this spring in a massive streamlining that will also see stores close.