J.C. Penney shares plunged Friday, a day after the department store chain announced the departure of CFO Jeffrey Davis to pursue other opportunities, creating another gaping hole in the retailer’s C-Suite.
The stock skidded 10 percent Friday morning. It has lost more than 50 percent of its value over the past 12 months and now trades around $1.56, giving the company a market cap of about $491 million.
Davis’ departure, effective Monday, follows the exit of Marvin Ellison as CEO earlier this year to go to Lowe’s. Penney’s chief customer officer, Joe McFarland, quit the company this summer to follow Ellison to the North Carolina-based home improvement retailer.
Penney has been searching for a replacement for Ellison since May. When he left, Penney created an “Office of the CEO” consisting of Davis, McFarland, Chief Digital Officer Therace Risch and Mike Robbins, executive vice president of supply chain. Now, only two of them are still at the company.
“While there have been some recent green shoots in the company’s business trends, including the recovery in the women’s apparel business, success in Sephora and continued strength in active, [Penney] is in need of more consistency in its performance,” Telsey Advisory Group analyst Dana Telsey said in a research note.
She said Davis’ departure only “creates another overhang (in addition to the CEO vacancy) to the J.C. Penney story.”
While the department store sector as a whole is considered to be under increasing pressure, Penney has struggled more than some of its peers, like Macy’s and Nordstrom. In the latest quarter, Penney lowered its outlook for the full year, as it continued to grapple with an overhang of too much inventory.
As Penney looks for Davis’ replacement, the company said Jerry Murray, a senior vice president of finance, will serve as interim CFO.