JC Penney Company Inc. (JCP), a leading retailer of apparel and footwear, accessories, fashion jewelry, beauty products and home furnishings, recently reported third-quarter 2009 results.
The quarterly earnings of 11 cents a share tumbled 80% from 55 cents posted in the prior-year quarter, weighed down by qualified pension plan expense. Earnings missed the Zacks Consensus Estimate by a penny.
The retailer, however, mentioned that earnings outshined the company’s initial guidance range of a loss of 5 cents to profit of 5 cents a share on the heels of effective inventory management and lowered unprofitable discounting. Consequently, gross profit rose 1.9% year-on-year to $1,696 million.
On stronger-than-expected results, JC Penney raised its fiscal year 2009 earnings outlook. Management now expects earnings in the range of 93 cents to $1.08 per share, as against 75 cents to 90 cents previously anticipated. For the fourth-quarter 2009, earnings are expected between 70 cents and 85 cents a share.
Total revenue slipped 3.2% to $4,179 million, reflecting comparable-store sales decline of 4.6%. By categories, driving sales were the shoes and women’s apparel. The fine jewelry category registered softness in demand during the quarter.
JC Penney remains optimistic for the full year 2009, as it now expects comps to dip in the range of 6.5% to 7%, compared to a decline of 7% to 7.5% forecasted earlier. For the fourth quarter, comps are expected to slip in the range of 4% to 6%.
During the quarter, the company opened three new stores. With the opening of these stores, JC Penney completed its 2009 new store expansion program and brought the total to 17. The company currently operates 1,109 department stores in the United States and Puerto Rico. JC Penney also operates the largest apparel and home furnishing site, jcp.com, besides the largest general merchandise catalog business.
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