PLANO, Texas - J.C. Penney Co. Inc., the big middle-market department store chain, warned yesterday that it would report disappointing first-quarter profit - another sign consumers were cutting discretionary spending in the face of higher gasoline prices and falling confidence.
Penneys shares initially tumbled nearly 14 percent before regaining some ground later in yesterday's trading, and the stock of other retailers also fell.
The company said it now anticipated first-quarter net income of about 50 cents per share compared with its prior forecast for a profit of 75 cents to 80 cents per share. Analysts had been expecting 75 cents per share, according to a survey by Thomson Financial.
Chief executive Myron Ullman said higher energy costs, a drop in hiring, and weak housing and credit markets were weighing on consumers' minds.
"Consumer confidence is at a multi-year low," Ullman said in a statement. He said tax refunds might help for a while, but "we expect the continuation of a difficult environment over the course of 2008."
The chain said sales at stores open at least a year - a key measurement in retailing - would fall at least 10 percent in March and by a "high single-digit" percentage for the entire quarter.
Shares of Penneys closed down $3.04, or 7.5 percent, at $37.48 on the New York Stock Exchange.