Shares of J.C. Penney (JCP) and higher-end peer Nordstrom (JWN) added to the retail wreckage of the last few days, after reporting lower comparable store sales in the first quarter. The retailers' reports followed disappointing reports from others in the space, including Macy's (M) and Kohl's (KSS), which both posted lower overall sales and same-store sales in the quarter.

J.C. PENNEY: J.C. Penney reported Q1 adjusted EPS of 6c, compared to forecasts for a 21c loss. However, revenue of $2.7B fell below forecasts of $2.77B, and comp sales slid 3.5%. CEO Marvin Ellison noted that February was a "very challenging month," but said on the earnings call that the nine-week March-April combined comp improved 600 basis points from February. The company said Home, Sephora, Fine Jewelry and Salon all comped positively in the quarter. Looking ahead, J.C. Penney backed its guidance for fiscal 2017 adjusted EPS of 40c-65c and SSS down 1%-up 1% and gross margin up 20-40bps. Ellison said the retailer is "confident" Q2 comps will be within the guided range for the year and backed his view that EBITDA for the year will be about $1.1B and free cash flow will be about $300M-$400M. Ellison said J.C. Penney plans to enhance Nike (NKE) departments in 600 stores and add women's Adidas (ADDYY) apparel to 400 stores by back to school. J.C. Penney is delaying its planned closure of 138 stores by about a month after sales picked up in the locations. The company will begin the liquidation process later this month for the majority of the stores, J.C. Penney said today.

NORDSTROM: Nordstrom yesterday reported adjusted EPS of 43c, well above estimates of 27c. Revenue for the quarter of $3.35B was slightly above the $3.34B consensus, but comp sales declined 0.8% for the total company. Nordstrom brand net sales fell 1.7% in Q1 and comp sales declined 2.8%, while net sales at the Nordstrom Rack brand, which includes Nordstrom Rack stores and NordstromRack.com/HauteLook, increased 8.7% for the quarter and SSS rose 2.3%. Nordstrom backed its adjusted EPS view of $2.75-$3.00, revenue growth view of 3%-4% and SSS growth view of roughly flat. Nordstrom said on its earnings call that while there may be opportunities to close stores, it is not part of its strategy.

WHAT'S NOTABLE: Mall-based retailers have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M, as well as an increase in online shopping.

SECTOR PEERS: Yesterday, sector peer Macy's cratered after reporting lower EPS, revenue and comparable sales than analysts expected. While Macy's backed its guidance for fiscal 2017, it acknowledged that the back half of the quarter performed better than the first half. Macy's expects the improvement in the comp trend to begin in Q2 and continue to build in Q3 and Q4. On its earnings call, Macy's CEO Jeff Gennette said that he has known "for some time" that the U.S. is over-retailed compared to other markets, not surprising to see contraction in retail square footage. Macy's will introduce a new marketing strategy in Q3. Kohl's also reported earnings yesterday, with EPS that beat expectations, though its revenue fell below estimates and its SSS declined 2.7%. Kohl's CEO Kevin Mansell said sales in February declined high single digits and improved to down 1% in the March-April combined period, but he is putting February "to the side," citing colder weather and delayed tax refunds. Kohl's said it sees an opportunity to capture sales from competitors' stores that are closing, which may include closing stores from Macy's and J.C. Penney. Earlier in the week, Sears (SHLD) CEO Edward Lampert accused the media of "unfairly singling out" the company over the past decade, blaming "irresponsible" news for the company's issues, Reuters reported, citing a presentation Lampert made at an annual shareholders' meeting. Sears, which has not reported a profit for six years, is in the midst of a turnaround strategy, but the retailer has warned it may not be able to continue as a going concern.

ANALYST COMMENTARY ON NORDSTROM, MACY'S: Commenting on Nordstrom, UBS analyst Michael Binetti reiterated his Buy rating and $51 price target said the underlying fundamental story is largely unchanged despite the slightly worse than expected same-store sales and gross margins. Meanwhile, Cowen analyst Oliver Chen said Macy's financial model is "worrisome," cutting hsi price target to $29 from $44. Citi analyst Paul Lejuez also lowered his price target for Macy's to $23 saying the company's results yesterday "stood out as extremely weak" amid disappointing quarters across the sector. Jefferies analyst Randal Konik said Macy's Q1 miss reinforces his view that department stores are in a "tough spot" and significant hurdles remain to reinvigorate sales growth.

PRICE ACTION: In morning trading, J.C. Penney is down 8.3% to $4.85, while Nordstrom is down 7.4% to $42.78. Kohl's is down 1.3%, Macy's is down about 1% and Sears is down nearly 7%. Dillard's (DDS), another retailer that reported its results this week, is flat.