Penney Says 1Q Net Income Doubled

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    NEWSLETTERS

    Racked

    J.C. Penney Co. reported that its first-quarter net income more than doubled as the department store operator benefited from sales improvements across most types of merchandise and tighter inventory.

    The retailer raised its full-year guidance on Friday, but even the higher forecast and the second-quarter outlook was muted as its consumers remain "concerned about their budgets."

    The chain on Friday posted net income of $60 million, or 25 cents per share, for the quarter ended May 1. That compares with $25 million, or 11 cents per share, in the year-ago period.

    Total revenue rose 1.2 percent to $3.93 billion. Revenue at stores opened at least a year rose 1.3 percent. The measure is considered a key indicator of a retailer's health.

    Analysts surveyed by Thomson Reuters expected 25 cents per share on revenue of $3.93 billion.

    "We know that our customers remain concerned about their budgets; however, they respond well to merchandise that's new and trend-right at compelling prices," Myron E. Ullman III, chairman and CEO, said in a statement.

    Penney said six of the seven merchandise divisions had revenue gains. The strongest areas were men's, shoes and handbags and children's.

    Penney's sales have improved, but the gains haven't matched those of some competitors such as Macy's Inc. Macy's reported Wednesday that revenue at stores open at least a year rose 5.5 percent during the first quarter.

    Penney is working to improve its merchandise assortment and increasing its exclusive items. This spring, the retailer launched an exclusive line called Olsenboye as part of a partnership with actresses Mary-Kate and Ashley Olsen.

    Starting this fall, Penney will be the only U.S. retailer to sell all the Liz Claiborne lines, except for the Isaac Mizrahi-designed Liz Claiborne New York brand, which goes to QVC.

    Also this fall, Penney will become the only department store selling MNG by Mango, a European clothing brand.

    Penney, based in Plano, Texas, said it expects revenue at stores open at least a year to rise between 2.5 percent and 3 percent. It estimates that earnings per share between 10 and 13 cents per share. Analysts expect 13 cents per share.

    For the full year, Penney said it expects that earnings per share will be $1.64, a penny below what Wall Street analysts had expected. Penney had said in February that it expected full-year profit to be $1.55 per share.

    Penney executives outlined a five-year plan to investors last month that included increasing revenue by $5 billion by the end of fiscal 2014. It also said it aimed to have revenue of $23 billion by the end of that fiscal year, primarily by increasing sales at existing stores, rather than through expansion.

    It also expects earnings to reach more than $5 per share by the end of fiscal 2014.

    In the fiscal year ended Jan. 30, profit totaled $1.08 per share on revenue of $17.56 billion.