US: JCPenney drops Q1 outlook amid weak spending
US department store retailer JC Penney Company has lowered its first quarter sales and earnings guidance to reflect weakness in the consumer spending environment.
With sales during the Easter holiday well below expectations, JCPenney is now guiding a high-single digit sales decline for the first quarter and Q1 earnings of approximately $0.50 per share.
This compares to previous guidance of a quarterly sales decline in the low-single digits and earnings in the range of $0.75 to $0.80 per share.
"Consumer confidence is at a multi-year low," said Myron E (Mike) Ullman, III, chairman and chief executive officer of JCPenney.
"JCPenney 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.
"The sharp decline in sales is reflective of these trends. While the economic stimulus package may provide some temporary benefit, we expect the continuation of a difficult environment over the course of 2008.
"As a result, our management team is focused on enhancing the customer experience and finding additional opportunities in both our merchandising and expense management to best position the company to benefit when a recovery takes hold."
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