J.C. Penney Trims Q3 Same-store Sales Guidance

(RTTNews) - J.C. Penney Co Inc (JCP), Wednesday slashed its same-store sales guidance for the third quarter, citing weak sales in September due to lower levels of clearance and tough retail environment.

The struggling department chain said it now expects third-quarter same-store sales to be in the low-single digit range, down from its original guidance of mid-single digit growth.

JC Penney reaffirmed all other guidance for the third quarter and fiscal year 2014, which includes delivering mid-single digit same-store sales growth and positive free cash flow for the year.

Penney shares closed the day's session at $8.19, down 11 percent.

The announcement comes at a time retailers face intense rivalry, and resort to price cuts and spend on promotions.

JC Penney, based in Plano, has been restructuring itself ever since Mike Ullman took over reins after the forced exit of Ron Johnson, who failed in his attempts to boost sales by pulling out coupons and discounts.

Also JC Penney, at its 2014 analyst meeting today in New York City, presented plans for restoring sustainable profitable growth at the company over the next three years through 2017.

The company said it expects to achieve $1.2 billion in EBITDA in 2017, on expectations for top line improvements and market share gains in its underlying business, which represents a $3.5 billion sales opportunity. Of this, the company expects to realize about $2 billion in incremental sales over the next three years.

"I am confident that the initiatives we are putting in place will fuel new growth and earn greater customer loyalty as we pursue our vision to become the preferred shopping choice for Middle America," said Ullman.

JC Penney said it has rebuilt and reestablished the right merchandise assortment, including private and national brands, and is ramping up its online presence by advancing the mobile commerce functionality of jcpenney.com.

The company has identified three areas of the business that are expected to generate incremental sales growth between 2015 and 2017. These include revitalizing the highest traffic area in the store, improving the productivity of the Home Store with value-driven products and a tailored promotional strategy, and leveraging its omnichannel capabilities.

J.C. Penney stock closed Wednesday at $8.19, down $1.00 or 10.88%, on a volume of 73.7 million shares on the NYSE. In after hours, the stock gained $0.09 or 1.10% at $8.28.