JCP J C Penney Company Inc

J.C. Penney Co. on Friday reported an unexpected decline in revenue in the first quarter of the year, unable to avoid a slump in sales that has battered the retail industry.

Shares, already down 22% this month, lost another 13% premarket to $6.80.

"The first quarter was clearly challenging from a sales perspective," said Chief Executive Marvin Ellison, noting that "our business was not immune to the issues facing other retailers."

On Wednesday, Macy's Inc. set off fresh fears about the health of the U.S. retail sector as the country's largest department-store chain reported its worst quarterly sales since the recession. After that, Nordstrom Inc. cut its financial projections for the year following worst-than-anticipated results for the first-quarter, and said it needed bigger discounts to clear inventory. Kohl's Corp., meanwhile, posted a 87% drop in profit in the latest quarter and a surprise decline in sales.

In all for the quarter, Penney's loss narrowed to $68 million, or 22 cents a share, from $150 million, or 49 cents a share, a year earlier. On an adjusted basis, the loss was 32 cents. Analysts polled by Thomson Reuters had expected an adjusted loss of 38 cents a share.

Sales slipped 1.6% to $2.81 billion, below analysts' forecast for a rise to $2.92 billion. Sales at existing stores fell 0.4%. Still, Penney backed its same stores sales guidance for growth of 3% to 4% this year, citing "the positive nature of our recent sales trends," strength in its Sephora business and accelerated appliance rollout.

Gross margin edged down to 36.2% from 36.4% a year earlier, hurt by additional markdowns due to unseasonable weather.

Penney said its men's line, footwear and handbags, and Sephora were among its top-performing divisions.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

May 13, 2016 08:35 ET (12:35 GMT)

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