NEW YORK – The first increase in more than two years for a key sales measure at J.C. Penney was not enough to win over Wall Street, which punished the retailer’s shares.
The company’s stock plunged almost 11 percent Tuesday, closing at $5.08.
Sales in established stores, a key measure of a retailer’s health, rose 2 percent during the November-January quarter. But analysts had expected a 4.2 percent increase, according to FactSet estimates.
And it was not enough to erase from investors’ minds a 31.7 percent plunge in the sales measure for the 2012 holiday quarter. That period had capped a disastrous first year under former CEO Ron Johnson.
During the nine-week holiday period in November and December, the sales metric rose 3.1 percent.
It was a brutal holiday season, which can account for 20 percent to 40 percent of a retailer’s annual sales, for much of the retail sector.
The slow economic recovery, a stubbornly high unemployment rate and fierce competition from online retailers like Amazon.com forced traditional retailers to discount heavily just to get people through the door.
J.C. Penney does not have anywhere near the room to maneuver that Wal-Mart and other major retailers have.
The rate at which J.C. Penney burns through cash has led to a large exodus by investors.
On Tuesday, the company said that it ended 2013 with more than $2 billion in total available liquidity. That was in line with most estimates, but far from healthy for a company that recently posted its seventh consecutive quarter of big losses.