Department store operator JC Penney Co Inc <JCP.N> on Friday cut its first-quarter earnings forecast and said it expects the environment to remain difficult throughout 2008, stoking fears that the second half of the year will not bring relief to struggling U.S. retailers.
Penney now expects first-quarter earnings of approximately 50 cents per share, down from its previous view of 75 to 80 cents per share.
It also expects a low-double-digit decline in March sales at stores open at least a year, known as comparable store sales, and a high-single-digit decline in comparable-store sales for the first quarter. Its previous view was for comparable store sales in March and the first quarter to decline in the low single digits.
"Consumer confidence is at a multi-year low," Myron "Mike" Ullman, chairman and chief executive officer, said in a statement.
"JC Penney counts half of American families as its customers, and they are feeling macro-economic pressures from many areas, including higher energy costs, deteriorating employment trends and significant issues in the housing and credit markets," he said.
*********In February, Penney reported a nearly 10 percent decline in quarterly profit and said there was no clear indication the consumer environment would improve in 2008.
It also posted a 6.7 percent drop in February sales at stores open at least a year while analysts, on average, were expecting a decline of just 1.9 percent.
Those disappointing February sales figures prompted JP Morgan analyst Charles Grom to downgrade his rating on the retailer's shares to "neutral" from "overweight," and he said at the time that the company's outlook for its March sales was "too aggressive."
Shares of Penney were down $3.86, or 9.5 percent, at $36.66
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