J.C. Penney Co Inc (NYSE:JCP) posted fourth quarter sales that missed analysts’ expectations, underlining the struggles high street retailers face from the consumer shift towards online shopping.
The department store chain said comparable-store sales increased 2.6% in the quarter to February 3, below market forecasts for a 2.9% increase.
Net sales rose 1.8% to US$4.03bn, also undershooting expectations of US$4.05bn.
Like many other bricks and mortar retailers, J.C. Penney has faced tough competition from e-commerce rivals such as Amazon Inc (NASDAQ:AMZN) as more consumers prefer the ease of online shipping.
Shares fell 10.4% to US$3.5 each in US pre-market trading.
Net income rose to US$254mln, or 81 cents a share, from US$192mln, or 61 cents per share a year ago, boosted by a US$75bn tax benefit on the back of US President Donald Trump’s reforms.
Adjusted earnings beat forecasts
Excluding items, the company earned US$179mln, or 57 cents per share, beating estimates of 47 cents.
The retailer plans to cut about 230 jobs, which is expected to save between US$20mln and US$25mln in costs annually.
For 2018, the group expects full year earnings of 5 and 25 cents per share.
"In 2018, we will intensify our market share efforts in appliances, mattresses and furniture, while continuing to take steps to modernise our apparel assortment and omni-channel,” said chairman Marvin Ellison.
“Our strategy and plan is clear and consistent, and we remain focused on two critical factors - to operate the business for growth and deliver profitable earnings.”