US department store group JC Penney saw its shares take a tumble last night after the retailer posted lower than expected results.
JC Penney, which operates 1,060 stores, reported a 4.4% rise in same-store sales in the three months to the end of January, lower than City expectations. The retailer had been expected to report a same-store sales rise of between 3% and 5%.
The retailer posted a loss of $59m (£38m) during the period, compared with a profit of $35m (£22.7m) in last year’s fourth quarter, which it said benefited from a one-off $270m (£175m) non-cash tax credit.
The lower-than-expected results led to JC Penney’s shares tumbling 12% in after-hour trading to $8.04 (£5.02), from a close of $9.12 (£5.92).
The department store group reported net sales of $3.89bn (£2.53bn) compared with $3.78bn (£2.5bn) in the fourth quarter of 2013. It said menswear, homewares and fine jewellery were the retailer’s top-performing divisions during the quarter.
Gross margin improved 540 basis points to 33.8% of sales, compared with 28.4% in the same quarter last year. The retailer said gross margin was positively impacted by significant improvement in the company’s merchandise mix and margin on clearance sales over the prior year quarter.
JC Penney chief executive Myron Ullman said: “2014 was a successful year for JC Penney. Thanks to the hard work and outstanding execution by our teams, we significantly grew sales and gross margin and delivered on our goal to generate positive free cash flow, representing a $2.8bn (£1.81bn) improvement over last year.
“I am extremely proud of all that has been accomplished to restore this great company. We are back in the eyes of our customers, back running the business effectively and back on solid financial footing. We fully intend to build on this momentum and continue to significantly improve our business in 2015.”