With less than 24 hours before the automatic spending cuts known as the sequester kick in, stocks are nevertheless higher despite the fact that the retail sector is exerting significant downward pressure. As of 2:45 p.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) is up 43 points, or 0.31%.
The once-popular discount retailer J. C. Penney (NYSE:JCP) reported what can only be described as apocalyptic fourth-quarter results after the bell yesterday. Sales at stores open for at least one year were down a staggering 32% during the pivotal holiday-shopping season. Total revenue came in at $3.88 billion, compared with $5.43 billion in the same period of 2011. And the company said its fourth-quarter net loss was $522 million, or $2.51 per share. Analysts surveyed by Thomson Reuters had forecast a much smaller loss of $0.18 per share. Given these results, it's no surprise that shares of J. C. Penney are currently down 15.5%.
Shares of Sears Holdings (NASDAQ:SHLD) are down 5% following the company's earnings release this morning. While same-store sales at its namesake Sears chain increased 0.8% for the quarter, they declined by 1.4% for the year. At the company's Kmart chain, sales fell by 3.7% for both the quarter and the year. For the three months ended Feb. 2, Sears lost $489 million, contributing to a $930 million loss for all of 2012.
Sears chairman and newly installed CEO Edward Lampert nevertheless tried to paint the picture in the best light by saying that "Sears Holdings made progress in 2012 improving the profitability of our business, but we know there's more work to be done in 2013." Given the fact that the company wasn't actually profitable, the latter part of Lampert's statement probably deserves the most emphasis.
On the Dow, shares of Wal-Mart (NYSE:WMT) are down slightly after the company reported that its chief administrative officer will step down on March 13. The retail giant has been struggling to deflect concerns stemming from internal communication leaks. Last week, a series of emails were obtained by the media suggesting that February sales at the company are a "total disaster." And new internal conversations published by Bloomberg News today suggest that Wal-Mart is struggling to keep its shelves stocked. "We run out quickly and the new stuff doesn't come in," U.S. chief executive officer Bill Simon purportedly said in a meeting on Feb. 1.
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