J C Penney Company Inc (NYSE:JCP) is holding its analyst day today, and apparently investors don’t like the retail chain’s updates. Perhaps the biggest problem is that the company expects only a low-single digit increase in same store sales in the 2014 fiscal year. That’s a decline from management’s previous expectation of a mid-single digit increase.
Trading on J C Penney resumes
Shares of J C Penney Company Inc (NYSE:JCP) were halted briefly after they tripped a circuit breaker, but they continued to plunge after trading on them resumed. As of this writing, more than 22 million shares of the company had already changed hands. The average daily volume is only 18.15 million shares.
The department store chain reported that sales slowed down in September but also that gross margins would increase quite a bit next year. Management also reiterated their expectation for J C Penney to become cash flow positive.
J C Penney to target online sales
Fortune reports that J C Penney Company Inc (NYSE:JCP) also revealed plans to try to get back into the ecommerce game. The retailer got into online retail nearly two decades ago, well ahead of its rivals. In 2007, the company recorded $1.5 billion in web sales, coming out much further ahead of competitors Macy’s, Inc. (NYSE:M) and Kohl’s Corporation (NYSE:KSS).
J C Penney’s biggest problem came in 2012 when then-CEO Ron Johnson tried to change the products the company carried, resulting in customers running away in droves. That year, the retailer saw a 33% decline in online sales and posted a loss of $1 billion. Meanwhile competitors dumped hundreds of millions of dollars into their websites to pull in more sales.
Management told Fortune today that they must fix J C Penney Company Inc (NYSE:JCP)’s online sales. They’re planning to make some investments into ecommerce but that if they do it well, online sales could eventually be up to 20% in total sales. This year, online sales are about 10% of the company’s total sales.