JC Penney shares hit all-time low after slashing outlook

(Bloomberg photo by Patrick T. Fallon)

NEW YORK (AP) — J.C. Penney slashed its annual profit forecast as it accelerated the clearance of slow-moving inventory, primarily in women’s clothing, and warned of weaker sales.

Shares tumbled more than 20 percent to an all-time low in early trading Friday, pulling Sears, Dillard’s, Kohl’s and other retailers down with it.

The S&P index that tracks department stores tumbled almost 4 percent.

J.C. Penney, which had told investors to expect per-share profits between 40 and 65 cents, now says it expects those profits to be between only 2 and 8 cents.

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The Plano-based company will release third-quarter earnings on Nov. 10.

Revenue at stores opened at least a year will be unchanged or down 1 percent for the year, the department store said Friday, just two months after saying that that revenue could be up as much as 1 percent.

For the third quarter, which ends Saturday, the company expects a per-share loss of 40 to 45 cents. That’s much deeper than the 17 cent loss that analysts expected, according to FactSet.

Slashing prices on poor-selling merchandise helped sales in September and October but that has squeezed profits. It was the right decision, the company said Friday, as it moves into the crucial holiday season.

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J.C. Penney, like other retailers, has struggled to follow shoppers who have migrated online.

Shares, already down 65 percent this year, dropped 80 cents to $2.85.