What: Shares of retailer J. C. Penney (JCPN.Q) are getting crushed in Friday trading, down 13% as of this writing. This is a bit of a surprise, considering the company reported third quarter results before market open that came in better than analysts were expecting, and the company also reaffirmed its full-year guidance.
So what: If you didn't notice, retail and consumer stocks are getting smashed today. Competitor Kohl's(KSS 6.51%) shares are down over 6%, roughly giving back gains that company's stock made on Nov. 12 after reporting a 1% jump in its same-store-sales results, after seeing a decline in the prior quarter.
The company said it saw good traffic in the back to school shopping season, and that traffic was remaining steady heading into the pre-holiday shopping season, leading it -- like J. C. Penney -- to reaffirm its own guidance for the year.
Now what? So back to J.C. Penney -- what gives? In short, it's timing as much as anything, as this earnings season has seen a number of big-box retailers report poor sales results and cut their guidance for the full-year, including the more upscale Macy's and Nordstrom.
Factor in the Commerce Department reporting that retail and restaurant sales grew a paltry 0.1% in October, and an all-but guaranteed interest rate increase in December, and it's turned into a bit of a sell-fest today.
Looking at the bigger picture, J.C. Penney management has continued to make steady (if slow) progress in righting the ship after more than a year of fumbling with multiple CEOs and no clear vision or direction forward. However, even with the improvements, it's not easy to paint a picture of market-beating results for the company, which will continue to face growing competition from online retail, which accounted for essentially all of the growth reported in October by the commerce department.
