JCP J C Penney Company Inc

By Suzanne Kapner and Aisha Al-Muslim 

Sales at Kohl's Corp. and J.C. Penney Co. weakened in the latest quarter as the retailers experienced a slower start to the year.

Kohl's comparable sales fell 3.4%, while comparable sales at Penney dropped 5.5%. Both retailers missed analysts' expectations for the quarter, which ended on May 4.

Their results are in contrast to other chains that reported strong results last week, including Walmart Inc. and Macy's Inc. On Tuesday, TJX Cos., the parent of T.J. Maxx and Marshalls, said comparable sales rose 5%.

Comparable sales are a common metric in retail based on revenue at stores open at least one year.

Home Depot Inc. also posted a rise in quarterly comparable sales. But the 2.5% increase was slower than expected by analysts, hit by a drop in lumber prices and rainy February weather that stalled some seasonal buying, the company said Tuesday. The home-improvement retailer maintained its guidance for the year as sales are returning with warming weather, said Chief Financial Officer Carol Tomé on a call with analysts.

Shares of Kohl's fell 9% in midday trading, while Penney's shares dropped 8%. Home Depot declined 0.4% and TJX was up almost 1%.

Kohl's said its sales shortfall was due to unusually cool spring weather as well as more competitive pricing and promotions by competitors. It plans to increase promotions going forward, which, along with additional costs related to rising tariffs on Chinese imports, prompted it to lower its guidance for the year. Kohl's imports about a fifth of its goods from China.

The Menomonee Falls, Wis. company now expects earnings for the current fiscal year to be $5.15 to $5.45 a share, compared with a prior range of $5.80 to $6.15 a share.

Kohl's expects sales to begin growing again in the second half of the year, as it rolls out a program in which it accepts returns of items purchased on Amazon.com Inc. at all of its stores and launches new brands, including Nine West.

Kohl's Chief Executive Michelle Gass said she didn't believe the company's weak results were due to a broad slowdown in consumer spending. "All the indications for the consumer continue to be strong," she said.

Kohl's total revenue fell 2.9% to $4.09 billion in the period. Net Income declined 17% to $62 million.

Penney has been struggling to turn itself around under new CEO Jill Soltau. She said the company is focused on getting the basics right, such as buying the right products, marketing them appropriately and reducing inventory. Ms. Soltau said she plans to outline a more comprehensive strategic vision in coming months.

Penney was also hurt by its decision in February to stop selling major appliances, and only sell furniture on its website and at some Puerto Rico stores, a reversal of the prior CEO's strategy.

Total revenue at Penney fell 4.3% to $2.56 billion. Its net loss widened to $154 million from a loss of $78 million a year ago.

Penney, based in Plano, Texas, has been hiring executives to carry out its turnaround plan, and on Tuesday it said it brought in a chief customer officer who will join the firm from grocery chain Sprouts Farmers Market.

Sarah Nassauer and Micah Maidenberg contributed to this article.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Aisha Al-Muslim at aisha.al-muslim@wsj.com

(END) Dow Jones Newswires

May 21, 2019 12:45 ET (16:45 GMT)

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