JCPenney earnings fall 78%, beating expectations
Company raises 4Q outlook
-- Home Textiles Today, 11/13/2009 10:18:00 AM
Plano, Texas – JCPenney was expected to deliver anything from a 5-cent loss per share to 5 cents in earnings, but wound up generating 11 cents per share to the good. That was 78% less than last year’s earnings, but cheered Wall Street this morning enough to send its stock up over 7% by mid-day trading.
Sales in the third quarter ended Oct. 31 fell 3.2% to $4.2 billion, with comps down 4.6%.
"We’ve been trying to balane the top line and the bottom line," chairman and ceo Mike Ullman told analysts during this morning’s conference call. "We’re not going to play the game of buying sales."
Freed from the sharp markdowns of last year’s third quarter and with inventories at lower levels, gross margin rose 210 basis points to 40.6% of sales.
Women’s apparel and shoes were the strongest categories, jewelry the weakest.
Of the home department, Ullman predicted: "Soft home probably has more of an upside as far as the rebounding of the economy."
He said the company is pleased with sales of the new Cindy Crawford Style collection, especially bedding and window.
Overall, he said, the company is ahead of plan for the year and on-plan so far in November.
For the first nine months of the year, net income fell 89.5% to $51 million, or 22 cents per share, from $361 million, or $1.62 per share.
Sales fell 5.7% to $12.0 billion.
The company today also raised its guidance for the fourth quarter on two metrics. JCPenney expects a comp decline of 6.5% to 7.0% and earnings per share of 93 cents to $1.08. The company previously forecast EPS of 75 cents to 90 cents.
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