Tags: penney | jobs | profit | shares

Penney Said to Cut 360 Jobs as Forecast Disappoints, Shares Dive

Penney Said to Cut 360 Jobs as Forecast Disappoints, Shares Dive
Jonathan Weiss | Dreamstime.com

Friday, 02 March 2018 09:20 AM

Sales at J.C. Penney Co. Inc.'s established stores missed Wall Street targets in the fourth quarter, and its forecast for yearly earnings also lagged expectations, pushing its stock down 9 percent on Friday amid a report of further jobs cuts.

Penney confirmed to CNBC on Friday said it has eliminated 130 positions from its corporate headquarters in Plano, Texas.

A Dallas newspaper reported Thursday evening that the company was eliminating staff.

"Just as we conduct a review of our stores and supply chain operations each year, we continually evaluate the productivity of our Home Office structure to ensure that it efficiently aligns with the business," a spokesman told CNBC. "Certain positions have been eliminated as a result of this annual assessment."

Meanwhile, Penney is shaking up staffing within its department stores.

Roughly 230 positions have been cut from Penney's stores, the company confirmed on Friday,

The annual cost savings generated from the staff cuts — both in stores and at Penney's headquarters — are estimated to be about $20 million to $25 million.

Meanwhile, Penney's results contrast strong holiday-quarter sales from Macy's and Kohls earlier this week and underscore the struggle faced by some retailers in the face of unceasing competition from Amazon.com Inc.

Penney's weaker-than-expected sales growth also follows a rosy forecast from the retailer, which said in January it saw strong demand for home, beauty products and jewelry.

Its comparable-store sales rose 2.6 percent in the fourth quarter ended Feb. 3, missing analysts' average estimate of a 2.94 percent increase.

Penney forecast full-year earnings of between 5 and 25 cents per share, largely below analysts' average expectation of 20 cents, according to Thomson Reuters I/B/E/S.

The company also said on Friday it had cut about 230 jobs, a move expected to save between $20 million and $25 million in costs annually.

Its net profit fell to $254 million in the fourth quarter from $192 million, a year earlier. Excluding one-time items, Penney earned 57 cents per share, ahead of the analysts' estimates of 47 cents.

Net sales rose 1.8 percent to $4.03 billion, missing expectations of $4.05 billion.

© 2019 Thomson/Reuters. All rights reserved.

   
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Sales at J.C. Penney Co. Inc.'s established stores missed Wall Street targets in the fourth quarter, and its forecast for yearly earnings also lagged expectations, pushing its stock down 9 percent on Friday amid a report of further jobs cuts.
penney, jobs, profit, shares
348
2018-20-02
Friday, 02 March 2018 09:20 AM
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