(By Balachander) J.C. Penney Co Inc. (NYSE: JCP) posted a quarterly loss as sales plunged and margins contracted sharply and shares of department store chain tumbled 11.48 percent in premarket trading on Friday.
For the three-month period ended Oct. 27, JCP lost 93 cents a share on an adjusted basis, compared with a loss of 18 cents a share in the same period last year. Net loss narrowed to $123 million from $143 million.
Total net sales fell 26.6 percent to $2.93 billion, trailing consensus estimate of $3.27 billion. Comparable store sales dropped 26 percent. Internet sales through jcp.com slumped 37.3 percent.
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Gross margin contracted to 32.5 percent from 37.4 percent, hit by lower sales and higher level of clearance merchandise sales.
"By far the largest part of our store is the old jcpenney, which continues to struggle and experience significant challenges as evidenced by our third quarter results," commented chief executive Ron Johnson.
Early this year, J.C. Penney unveiled a three-tiered pricing strategy favoring everyday low prices.
"While the quarter overall was challenging, the performance of jcp's new brands and shops reinforces our conviction to transform jcpenney into a specialty department store," Johnson said.
JCP shares, which have been trading in the 52-week range between $19.06 and $43.18, ended Thursday's regular trading at $21.69.