Reuters
Nov 15, 2009
JC Penney raises earnings view; shares up
Reuters
Nov 15, 2009
By Phil Wahba
NEW YORK (Reuters) - Department store operator J.C. Penney Co Inc (JCP.N) forecast earnings for the holiday quarter that could surpass Wall Street expectations, and its shares rose more than 6 percent.
The news came as Penney reported lower quarterly profit that met Wall Street expectations.
The company said it had benefited from tighter inventory management that raised its profit margin by 210 basis points to 40.6 percent during its third quarter, which ended on October 31.
Penney "maintained appropriate inventory levels and reduced both clearance selling and unprofitable discounting," Chief Executive Officer Myron Ullman said in a statement. "We expect these strategies to be particularly effective in the fourth quarter."
Penney forecast fourth-quarter earnings per share of 70 cents to 85 cents. Analysts on average were expecting 82 cents, according to Thomson Reuters I/B/E/S.
That would bring full-year profit to a range of 93 cents to $1.08 per share, up from the company's prior outlook of 75 cents to 90 cents.
That stands in contrast to rivals Macy's Inc (M.N) and Kohl's (KSS.N), which gave revised fourth-quarter outlooks below analysts' estimates to try to tame expectations for holiday spending in light of rising unemployment.
Penney's net profit fell to $27 million, or 11 cents a share, from $124 million, or 56 cents a share, a year earlier, in line with analysts' expectations.
Excluding a qualified pension plan expense in the current year, profit from continuing operations declined to 30 cents per share from 46 cents. Year-earlier results included a pension plan credit.
The company said the strongest results came from its shoes and women's apparel categories, with jewelry the weakest sector.
Sales fell 3.2 percent to $4.18 billion, in line with Wall Street estimates, while sales at stores open at least one year fell 4.6 percent.
The chain opened three new stores during the quarter.
Penney shares rose 6.3 percent to $31.24 in morning trading.
(Reporting by Phil Wahba, editing by Gerald E. McCormick and Lisa Von Ahn)
© Thomson Reuters 2024 All rights reserved.