NEW YORK — J.C. Penney Co.’s shares shed 2.6 percent of their value Monday after the firm said September comparable-store sales were running at the low end of the company’s forecast.
The Plano, Tex.-based national retail chain had expected same-store sales at its department stores to grow in the low-single digits, but it failed to meet that target, said Penney on a prerecorded call. Although sales at the catalog and Internet division performed “well above plan,” comps at the beleaguered Eckerd drugstore division were tracking slightly below the firm’s goal, which had been for comps to remain flat.
Penney’s stock declined 58 cents to close at $21.38 on the New York Stock Exchange.
At a meeting with analysts, Allen Questrom, chairman and chief executive, indicated that the firm will decide by the end of the year whether to sell Eckerd and noted that the firm had held discussions with prospective buyers of the chain.
“If we can get the right price — a price we think is better than we can get running it ourselves — we’ll do that,” Questrom was quoted as saying in one published report. Portions of the meeting weren’t immediately available due to technical problems.
Results among the various merchandise categories at the department stores were decidedly mixed, Vanessa Castagna, chief operating officer of Penney’s stores, merchandising and catalog told analysts, but women’s apparel has been and continues to be among the weaker selling classification.
“For the whole year to date, women’s apparel has been soft,” Castagna said. “Casual business apparel picked up a little bit faster than we thought and we weren’t ready for it. Our fashion was not relevant enough, and we didn’t have what our customers wanted. Juniors and outerwear were also disappointing, coming in below plan in August and September.”
Wal-Mart Stores said Monday September sales at its discount stores remained at the high end of its target of a 3 to 5 percent rise in same-store sales this month.
Price deflation continues to be a challenge for Penney’s, as it does for the industry as a whole, acknowledged Castagna.
“Average prices are going down,” she said. “It’s a struggle. We know it and we are attacking it. First, we need to be competitive on price. Second, we must keep adding quality. That’s why private brands and fashion are so important to us.”