JCPenney Shares Languish on Lower Guidance

Plano, Texas — Department store retailer JCPenney lowered its first-quarter sales and earnings guidance, projecting profit of about $0.50 per share — starkly below the previous projection of $0.75 to $0.80 EPS.

The 1,073-unit retailer also projected a high-single-digit decline in comp-store sales, replacing the previous guidance of a low-single-digit decline.

"Consumer confidence is at a multi-year low," said chairman and ceo Mike Ullman, as the $19.9 billion company reported "sales through the Easter holiday well below expectations."

Of the widely reported economic downturn, Ullman noted, "We expect the continuation of a difficult environment over the course of 2008." He said management would seek to position JCP to best advantage for the eventual economic recovery by "enhancing the customer experience and finding additional opportunities in both our merchandising and expense management."

In very heavy volume the day of the announcement (March 28), shares of JCPenney traded down more than 10% at the opening bell, then settled near a 7% loss by midday.

From its 52-week high of $84.54, reached nearly one year ago, retail-weary stockholders have driven down the JCP share price to the $40 to $50 range, where it has hovered since December.