Struggling department store chain JCPenney (JCP) reported first quarter earnings that missed analysts’ expectations across the board, and featured a steep drop in sales.
The department store chain reported a loss of 47 cents per share, versus analysts’ forecasts of a loss of 38 cents per share.
Revenue for the quarter came in at $2.44 billion, missing expectations of $2.47 billion, according to analysts polled by Bloomberg.
Only months after delivering a blueprint for a turnaround to investors, the retailer’s comparable sales also dropped by 5.5% during the first quarter.
Yet JCPenney’s CEO Jill Soltau insisted the embattled retail giant was turning the corner.
“We have made good progress on each of our immediate action steps highlighted last quarter, including our continued efforts to reduce and enhance our inventory position, which resulted in a 16 % reduction in our inventory and a meaningful improvement in our free cash flow this quarter,” she said.
“As our inventory rationalization effort continues, we are testing a number of strategies around optimal inventory levels and assortment choice counts with a goal of delivering an improved experience for our customers and maximizing our return on investment.”
The company expects to be free cash flow positive for fiscal 2019.
Shares of the retailer initially fell 20% in the pre-market, but recovered some of those losses to last trade near $1 per share. The stock has rallied since the start of the year, when JCPenney unveiled plans to get rid of low-margin products and boost sales.
Meanwhile, Kohl’s (KSS) posted weaker-than-expected first quarter earnings results, sending shares 10% lower in the pre-market. The department store chain reported a comparable store sales decline of 3.4%,
"The year has started off slower than we’d like, with our first quarter sales coming in below our expectation. We are actively addressing the opportunities that impacted our first quarter sales and we have strong initiatives that will enhance our sales performance in the second half,” CEO Michelle Gass said in a statement.
Elsewhere, Home Depot (HD) delivered comparable store sales growth that disappointed. The home improvement retailer saw its comp sales grow just 2.5% in first quarter, versus the 4.3% expected. In the U.S., same-store sales rose 3%.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.