J.C. Penney holiday sales drop in latest setback to sector

J.C. Penney Co Inc reported a decline in same-store sales for November and December, the latest department store chain to reflect the malaise in the sector as shoppers increasingly eschew brick-and-mortar stores and shop online.

The company's shares fell as much as 5.9 percent to $7.40 in early trading on Friday, hitting their lowest in seven months.

J.C. Penney's report comes a day after rivals Macy's Inc and Kohl's Corp said they had posted declines in same-store sales during the crucial holiday selling period.

Along with the shift to online retailers such as Amazon.com Inc, lower spending on apparel - the top sales driver for department stores - has weighed on the sector.

J.C. Penney reported a 0.8 percent drop in same-store sales for November and December. The retailer had reported a 3.9 percent rise in holiday same-store sales last year.

The company, however, maintained its earnings before interest, taxes, depreciation and amortization (EBITDA) target of $1 billion for fiscal 2016 ending January 2017.

"The first three weeks of November proved to be challenging in stores," J.C. Penney Chief Executive Officer Marvin Ellison said in a statement.

Ellison said weakness in women's apparel continued to impact sales but an improvement from Thanksgiving week through the end of December, driven by demand for products including appliances, boots and toys, made up for some of the losses.

Early holiday promotions and expectations among consumers that deals would always be available took a toll on sales in November, analysts have said.

The National Retail Federation had forecast that 2016 holiday period sales would rise 3.6 percent to $656 billion, mainly due to a rise in online shopping.

Amazon last week called its 2016 holiday season its best ever.

Some investors in the department store sector, however, are willing to give Macy's, Kohl's and some other chains more time to turn around, citing positive strategic changes in the face of a seismic shift in the sector.