JC Penney Stock Price Loses More Than 12% On Stock Market Declines Despite Earnings Beat

JC Penney Stock Price Loses More Than 12% On Stock Market Declines Despite Earnings Beat

  • Earnings and revenue beat estimates for the fourth-quarter
  • Same-store declines 7% in the fourth quarter, adding to a total decline of 7.7% for the full year
  • In 2020, J.C. Penney expects sales to decline between 3.5% and 4.5%

Shares of J.C. Penney, a US-based department store chain, are trading more than 12% lower in New York today in line with the rest of the stock market as the worsening global sentiment weighs on the equities.

Fundamental analysis: Positive earnings report

J.C. Penney reported better-than-expected fourth-quarter earnings despite the drop in the same-store sales. Adjusted earnings per share were reported at $0.13 cents, topping market estimates of $0.06 cents.

Revenue was reported at $3.49 billion, a decrease of 7.7% from a year ago, but still enough to beat analysts’ estimates of $3.44 billion. The company also reported a sharp decline in the same-store sales of 7%, but again better than the 7.7% expected from the market. For the fiscal 2019, same-store sales declined 7.7%.

“In Fiscal 2019, we met or exceeded all five financial guidance metrics for the year, and we delivered our third consecutive quarter of meaningful gross-margin improvement in the fourth quarter,” said Jill Soltau, chief executive officer of JCPenney.

J.C. Penney also said that it expects to close an additional 6 stores this year after it shut down a total of 27 stores in 2019.

For 2020, the store chain expects same-store sales in fiscal 2020 to be negative 3.5% to negative 4.5%.

“I am encouraged by our progress, especially in our women’s apparel businesses. We knew it would take time to restore discipline and return growth to JCPenney. As we move into Fiscal 2020, we remain focused on the key tenets of retail as we continue rebuilding the Company and implementing our Plan for Renewal,” added Soltau.

Technical analysis: New 6-month low printed

Shares of J.C. Penney are currently trading more than 12% lower as the stock market stumbles again on increased coronavirus fears. As a result, the stock price printed $0.62 today, which marks a fresh 6-month low for the stock.

J.C. Penney daily chary (TradingView)

As seen on the chart, the price action is now approaching the all-time low of $0.53, also recorded six months ago. If the extensive selling pressure continues before the weekend, a new all-time low is not excluded.

For any meaningful recovery to take place, the bulls need to push the price back above the $0.80 mark.

Summary

J.C. Penney stock price has joined the rest of the market in stumbling lower on the increased coronavirus fears despite the positive earnings report for the fourth-quarter. As a result, the stock price has made a new 6-month low as it threatens to print the record low below $0.53.

By Michael Harris
I began trading in my early 20's at a local company and since then have combined my knowledge and love of content to become a news writer. I am passionate about bringing insightful articles to readers and hope to add some value to your portfolios!

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