The Wall St.Journal 28Feb2020

THE WALL STREET JOURNAL. Friday, February 28, 2020 |B3

J.C. PenneyCo. said it ex-
pects comparable-store sales,
an important metric for mea-
suring the performance of a
retailer, to fall less in the cur-
rent fiscal year than they did
in fiscal 2019.
The company on Thursday
gave guidance for comparable-
store sales, or those at stores
open for at least a year, to de-
cline between 3.5% and 4.5%, a
smaller decline than for all of
fiscal 2019, when they dropped
7.7%.
For the fourth quarter, J.C.
Penney said comparable-store
sales declined 7%. Analysts
had been expecting a drop of
7.3%, according to FactSet.
This is the sixth quarter in
a row that the company has
reported a decline in same-
store sales.
J.C. Penney posted a quar-
terly profit of $27 million, or 8
cents a share, down from $75
million, or 24 cents a share, in
the same period a year earlier.
Its adjusted earnings were 13
cents a share; analysts had
been expecting an adjusted
loss of 6 cents a share.
Net sales at J.C. Penney
were $3.38 billion, down
nearly 8%. That met analysts’
consensus estimate.
The company was one of a
number of retailers that
logged lower sales over the
holiday season.
Shares of J.C. Penney, which
have declined 34% over the
past three months, fell about
5% on Thursday to close at
about 69 cents.
The New York Stock Ex-
change told the company late
last month that it wasn’t in
compliance with its listing re-
quirements after the retailer’s
average closing stock price
was below $1 for 30 straight
trading days.
—Suzanne Kapner
contributed to this article.

BYALLISONPRANG

J.C. Penney

Expects

Smaller

Sales Drop

around a quarter or sales orig-

inated online, the company

said.

Chief Financial Officer Matt

Bilunas said Best Buy was

closely monitoring develop-

ments related to the coronavi-

rus outbreak and that it ex-

pects most of the impact to be

felt in the first half of the

year. “We view this as a rela-

tively short-term disruption

that does not impact our long-

term strategy and initiatives,”

Mr. Bilunas said.

Best Buy’s results are a posi-

tive note amid a holiday sales

reporting season marked by

lackluster results from many

retailers, with some pointing to

the shorter holiday buying pe-

ing its Lord & Taylor chain

and its European operations.

Other department-store

owners also have faced pres-

sure amid major shifts in the

retail market. Macy’s Inc.

plans to close 125 stores over

the next three years, while

Nordstrom Inc. is still looking

for better results as it tries to

remake its business.

The deal is expected to

close and shares will be de-

listed as soon as next week,

the company said.

—Suzanne Kapner

contributed to this article.

also includesRhône Capital

LLC, raised its offer in Octo-

ber. The following month, Cat-

alyst Capital Group said it bid

C$11 a share in cash for Hud-

son’s Bay, a price Mr. Baker’s

group matched in January.

Hudson’s Bay had 42 Saks

Fifth Avenue stores, 115 Saks

Off 5th locations and 89 of its

namesake shops as of its quar-

ter that ended Nov. 2. The

company reported weaker

sales for that quarter and a

wider loss. The company in re-

cent years has moved to

streamline operations by sell-

create a better, more exciting

company. Being private, we’ll

be able to do that.”

Last June, the investor

group headed by Mr. Baker

proposed taking Hudson’s Bay

private, offering C$9.45 a share

for the 43% of shares in the

company that it didn’t already

own. The company had faced

pressure from activist investor

Land & Buildings Investment

ManagementLLC, which ar-

gued the value of the com-

pany’s real estate exceeded its

market capitalization.

Mr. Baker’s group, which

approved the deal.

Like other department-

store operators, the retailer

has struggled to adjust to the

growth of e-commerce sales

and new competition from on-

line-focused brands.

“As a public company we

were forced to tighten ex-

penses, to increase [earnings

before interest, taxes, depreci-

ation and amortization] and

increase distributions to

shareholders,” Mr. Baker said.

“This is the time in retailing to

reinvent, to upgrade our pres-

ence online and in stores, and

Hudson’s BayCo. share-

holders voted to take the re-

tailer private, allowing the

owner of Saks Fifth Avenue to

try to mount a turnaround

without the scrutiny of public

markets.

Shareholders agreed to sell

their stock to a group of inves-

tors including Hudson’s Bay

Executive Chairman Richard

Baker for 11 Canadian dollars

($8.25) a share. The company

said 98% of the votes cast at a

special meeting on Thursday

BYMICAHMAIDENBERG

Hudson’s Bay, Owner of Saks, to Go Private

BUSINESS NEWS

riod and weak toy and electron-

ics sales. The period between

Thanksgiving and Christmas

was shorter by six days com-

pared with the year before.

Target Corp. fell short of its

own expectations, citing weak

sales in toys and electronics.

Macy’s Inc. recently said it

would close another 125 of its

department stores. Walmart

Inc. said fourth-quarter sales

came in weaker than the com-

pany hoped, due to lackluster

demand for toys, apparel and

videogames in the last weeks

before Christmas.

Best Buy said it expects to

report comparable sales of flat

to 2% for the current fiscal year

and diluted earnings per share

of $6.10 to $6.30, which in-

cludes the company’s estimated

impact from coronavirus,.

Best Buy has undergone a

turnaround in the past six

years. The retailer shifted strat-

egies, matching prices to com-

petitors, adding services to re-

duce the company’s reliance on

new product releases and using

stores to fulfill online orders.

Sales growth has slowed

somewhat over the past year

amid uncertainty about the

impact of tariffs on Chinese

goods. For the full fiscal year,

comparable sales rose 2.1%.

Net earnings rose slightly

to $1.54 billion for the full

year, up from $1.46 billion the

previous fiscal year.

Best Buysaid sales rose

over the holiday season, citing

strong demand for phones and

appliances during a period

when many traditional retail-

ers reported lackluster results.

The company said compara-

ble sales increased 3.2% dur-

ing the fourth quarter ended

Feb. 1, marking 12 consecutive

quarters of sales growth. In

the U.S., online sales grew

nearly 19% to $3.52 billion

compared with the same quar-

ter last year due to high aver-

age order values and more

shoppers buying online, the

company said.

Categories that helped

boost sales included head-

phones, computing, appli-

ances, mobile phones and tab-

lets, the company said, offset

by declines in the gaming cat-

egory.

The retailer’s shares fell

more than 3% Thursday amid

a broader market selloff.

Overall revenue rose 2.7%

to $15.2 billion during the

most recent quarter. In the

U.S., which accounts for the

bulk of Best Buy’s sales,

BYSARAHNASSAUER

Holiday Business Rose at Best Buy

Demand for phones

and appliances lifts

the retailer, but shares

fall in broader selloff

For the full fiscal year, comparable sales rose 2.1%. A Best Buy store in Kansas on Black Friday.

CHARLIE RIEDEL/ASSOCIATED PRESS

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