J.C. Penney Co Inc posted a smaller-than-expected net loss as the retailer kept a tight lid on costs, but signaled results could miss expectations later this year, sending its shares lower.
The department store operator's net loss was $1 million, or nil per share, in the second quarter ended August 1, compared with a year-earlier profit of $117 million, or 52 cents per share.
Analysts on average expected a loss of 1 cent per share, according to Reuters Estimates.
Earlier in August, the company said it expected a quarterly loss of 1 cent per share, much smaller than the per-share loss of 8 cents to 12 cents it had forecast earlier.
Sales fell 7.9 percent to $3.94 billion. Sales at stores open at least a year fell 9.5 percent.
The company, which has fashioned itself as a value destination in the downturn, said on Friday that it had sold more merchandise at regular promotional prices and less at clearance prices.
Shoes and women's clothing were the strongest sellers, while children's apparel sales were weakest.
The results came two days after rival Macy's Inc posted a better-than-expected profit and raised its full-year outlook, but mixed results from two of its suppliers showed that times remain tough in the retail sector.
J.C. Penney said it now expected to earn 75 cents to 90 cents per share this year, up from a prior forecast of 50 cents to 65 cents, because of the second-quarter results and anticipated improvement in gross margin in the second half of the year. Analysts were calling for earnings of 88 cents per share.
The company expects this year's sales to fall 5.5 percent to 6.0 percent, with same-store sales down 7 percent to 7.5 percent.
J.C. Penney forecast third-quarter results ranging from a loss of 5 cents per share to a profit of 5 cents. Analysts had expected it to earn 14 cents.
The company said sales should fall 3 percent to 5 percent in the current quarter, with same-store sales down 5 percent to 7 percent.
Shares of J.C. Penney fell 2.1 percent to $32.65 in premarket trading.
(Reporting by Jessica Wohl in Chicago and Aarthi Sivaraman in Seattle; Editing by Lisa Von Ahn)