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JC Penney shares tumble after posting loss

Struggling retailer J.C. Penney delivered quarterly revenue on Friday that topped expectations, but its stock fell sharply, as did many other department store chains.

Penney posted a fiscal third-quarter loss of 47 cents per share, narrowing the red ink from 77 cents a share in the year-earlier period. Revenue rose to $2.90 billion from $2.76 billion.

The company had been expected to report a loss of about 55 cents a share on revenue of $2.88 billion, according to a consensus estimate from Thomson Reuters.

J.C. Penney shares were down 11 percent midmorning Friday.

Nomura Research retail analyst Robert Drbul told CNBC's "Squawk Box" on Friday that the company is making "tremendous progress" in its turnaround efforts.

But like many of its competitors, he added, Penney is going into the fourth quarter with "elevated inventories," noting merchandise stockpiles were up 9.3 percent in the quarter.

Earlier this week, the company posted better-than-expected same-store sales growth for its third quarter. CEO Marvin Ellison said the quarter's gross margins and earnings performance "exceeded our expectations."

The retailer said comparable-store sales grew by 6.4 percent, while analysts polled by FactSet expected a 5.7 percent increase.

J.C. Penney's results capped a volatile week for department stores ahead of the holiday shopping season — a period that's historically accounted for about a third of their annual sales and almost 40 percent of earnings.

Despite a lull in recent months, Nomura's Drbul expects holiday shoppers to "show up" eventually. "You look at a lot of the macro backdrop, the consumer has a reason to spend money this holiday season."

On Wednesday, Macy's Chairman and CEO Terry Lundgren told CNBC the department store chain is going to have lots of markdowns going into the holiday shopping season to get rid of bloated inventory.

Macy's reported fiscal third-quarter earnings that beat estimates but revenue that fell short. The retailer also warned on full-year earnings. The stock, which closed nearly 14 percent lower on Wednesday, was under pressure Friday morning, down 3.6 percent.

Following the trend at Macy's, Nordstrom late Thursday warned on full-year numbers. The retailer also missed estimates on quarterly earnings and revenue. The stock was down more than 17 percent midmorning Friday.

"Nordstrom took a lot of markdowns this quarter. Macy's has held off and they're going to take a lot of markdowns in the fourth quarter," Drbul said.

However, Kohl's, which competes more closely for the same customers as J.C. Penney, reported better-than-expected quarterly profit and sales on Thursday.

— CNBC's Fred Imbert and Ritika Shah, and Reuters contributed to this report.

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