J C Penney Q2 2017 earnings were released before opening bell this morning. The department store chain reported adjusted losses of 9 cents per share or $28 million on $2.96 billion in revenue, while analysts had been expecting losses of 4 cents per share on $2.84 billion in sales. In last year’s second quarter, J C Penney reported $2.92 billion in revenue and adjusted losses of 5 cents per share or $16 million.

j c penney q2 2017 earnings
By J.C. Penney (Brand New design website See article here) [Public domain], via Wikimedia Commons

J C Penney Q2 2017 earnings

On a GAAP basis, J C Penney posted a loss of 20 cents per share or $62 million, compared to 18 cents per share or $56 million in losses last year. Same store sales fell 1.3% year over year, compared to the consensus of a 1.2% decline. Adjusted EBITDA fell to $196 million from $233 million in the year-ago quarter.

J C Penney Q2 2017 earnings were hit by liquidations of inventory from 127 of the stores it closed. The liquidations weighed on the company’s gross margin and earnings per share, and CEO Marvin Ellison said the charges were isolated to the second quarter. Inventory fell 6.8% year over year to $2.8 billion. In addition to the liquidation from the closing stores, J C Penney’s comparable store inventory fell 3.7%year over year, which also contributed to the 6.8% decline in total inventory.

He also said that almost all of the retailer’s categories saw improving sales trends during the quarter. J C Penney’s best-performing divisions were Home, Fine Jewelry, Footwear and Handbags, Sephora, and Salon. The Southwest and Southeast regions were the department store chain’s best-performing geographic areas.

J C Penney affirms guidance

The department store chain also affirmed its full-year guidance of 40 cents to 65 cents per share in adjusted earnings. J C Penney also continues to expect same store sales to be down 1% to up 1% year over year. The company added that fiscal 2017 will have 53 weeks, while 2016 only had 52 weeks. The company included the extra week in its guidance numbers, except for the comparable store sales estimate, which was calculated on a comparable 52-week basis.

After J C Penney Q2 2017 earnings were released, the company’s stock plummeted and was on track to open at a record low. The shares plunged by nearly 23% to as low as $3.64 in premarket trades.