REUTERS: Shares of U.S. retail chain J.C. Penney Co Inc sank below US$2 for the first time on Thursday after it forecast a wider-than-expected full-year loss and posted disappointing results on the back of price cuts across product lines.
The company's shares fell more than 20 percent to US$1.92 in trading before the bell, its lowest since listing on the New York Stock Exchange a week before the launch of the Great Depression in 1929.
The company said it now expected a loss of between US$1 per share and 80 cents per share, much bigger than its previously estimated range of a 7 cent loss to a 13 cent profit.
"We took necessary actions to mark down and clear excessive inventory positions across many of our categories, which encompasses more than just seasonal product or fashion misses," Chief Financial Officer Jeffrey Davis said.
"We will continue to take actions to right-size our inventory," Davis added.
The poor results and cut in its annual forecast highlighted the struggles of brick-and-mortar retailers in attracting shoppers amid lower demand for apparel and cut-throat competition from Amazon.com Inc and other online players.
The company also relied on price cuts in the previous quarter as an unusually long winter hurt demand for spring clothing lines.
Earlier this year, Penney said it was "still playing catch-up" in certain areas, and that fixing its women's apparel business was its top priority.
Thursday's results showed same-store sales rose 0.3 percent, short of an analysts' average estimate of about 1 percent, according to Thomson Reuters I/B/E/S.
Net losses widened to US$101 million, or 32 cents per share, in the second quarter ended Aug. 4 from US$48 million, or 15 cents per share, a year earlier.
Excluding one-time items, the chain posted a loss of 38 cents per share, while analysts were expecting a loss of 6 cents per share, while total revenue also missed expectations.
J.C. Penney is in the midst of finding a replacement for Chief Executive Officer Marvin Ellison who left abruptly in May to join home improvement chain Lowe's Cos Inc .
The process is going well and the board has met with highly qualified candidates, the company said in the statement.
"We don't see an immediate catalyst for investors to get more bullish until the Street is more comfortable with the future of its management team and has a clearer sense of the company's strategic direction going forward," Gordon Haskett analyst Chuck Grom wrote in a pre-earnings note.
(This version of the story corrects to profit, not loss, of 13 cents in paragraph 3)
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Anil D'Silva)