JC Penney shocked analysts on Friday, reporting sales well below expectations for the first quarter of 2016. Net sales were down 1.6 percent to US$2.81 billion.

CEO Marvin Ellison reassured investors, claiming that the company’s growth strategy remains ‘on track’, with its store-in-store Sephora outlets continuing to drive traffic.

The retailer has managed to beat analysts’ expectations on one count, however, with a loss of US$68 million – or 22 cents per share – compared to a loss of US$150 million for the same period in 2015.