U.S. department store chain J.C. Penney (NYSE: JCP) slashed its 2017 comparable sales and profit forecast on Friday as it overhauled its women's apparel department and sold off stagnant inventory by discounting heavily.
The company's shares plunged 81 cents, or 22.1%, in Friday trading to $2.85, with the news pulling down shares of rivals Macy's Inc (NYSE: M) and Kohl's Corp (NYSE: KSS) as well.
Penney said it now expects full-year comparable sales to be flat at best, down from its previous forecast of sales to range between a drop of 1% and a rise of 1%.
The company said it would record an adjusted loss of 40-45 cents for the quarter ending Oct. 28 as it held clearance sales for women's and other apparel categories.
J.C. Penney cut its full-year forecast for adjusted earnings to two cents to eight cents per share from 40 cents to 65 cents.
Department stores try to clear out leftover inventory ahead of the holiday-shopping quarter to stock up on fresh merchandise for the biggest selling season of the year.
Penney also said Chief Financial Officer Jeffrey Davis would oversee the company's pricing and planning policies to improve its predictive analytics capabilities and get a better view of current sales trends.
Said CEO Marvin Ellison, "Based on the encouraging results from a third-quarter reset in women's apparel, which expanded our casual and contemporary offering, we made the strategic decision to accelerate a wider transformation of the entire women's department by clearing slow-moving inventory primarily in women's and other apparel
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