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JC Penney reports a wider-than-expected loss, stock at historic lows |

JC Penney reports a wider-than-expected loss, stock at historic lows

Plano-based J.C. Penney reported a bigger loss than expected on Friday as margins took a hit from liquidation sales. In the second quarter, Penney closed 127 stores of the 138 stores it has said it will close this year, but it still managed to post a sales increase of 1.5 percent. 

The retailer’s stock price has been trading at historic lows and closed at $3.93 on Friday,  down 79 cents. That’s the lowest Penney close at least since the late 1970s, according to data available. Penney’s stock started trading in 1929. 

CEO Marvin Ellison reaffirmed the company’s full-year forecast and said the hit that liquidation sales had on margins is “isolated in the second quarter.” He said closings “cannibalized” sales at other stores. “We’ve never liquidated this many stores at one time and it was difficult to estimate the impact on margins,” Ellison said during a conference call with analysts. 

“We don’t have a margin problem. Selling margins in our go-forward stores” increased 1.4 percentage points, he said.  While its largest apparel business improved from the first quarter, specifically in kids, clothing sales are still below a year ago. Home and beauty, including fine jewelry, salon and Sephora, shoes and handbags, posted positive sales in the quarter. 

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