Bottom Line Flat for J.C. Penney in Second Quarter
August 12, 2011,
PLANO, Texas-J.C. Penney posted exactly the same $14 million in net income in its second fiscal quarter as it did in the same period of last year.
Net sales in the quarter, which ended on July 30, slipped 0.8 percent to $3.9 billion, owing largely to its exit from the catalog business. The top line for the department-store retailer included a gain of 1.5 percent in same-store sales and an increase of 2.8 percent in sales on jcp.com.
J.C. Penney kept a tight control on its expenses in the quarter. Selling, general and administrative expenses fell 2.5 percent in dollars and 56 basis points as a percentage of sales, to 31.8 percent. Gross margin decreased by 108 basis points to 38.3 percent, reflecting a soft selling environment early in the quarter and the resulting increase in promotional activity.
"The challenging economy continues to impact the moderate consumers," said Myron Ullman III, J.C. Penney's chairman and CEO (who will be leaving the CEO post in November to be succeeded by Ron Johnson, senior vice president of retail with Apple). "Through our focus on building attractions, improving sales productivity in stores, managing expenses and streamlining operations, we are committed to delivering on the company's long-term earnings targets."
For the third company, J.C. Penney said it expects same-store sales to rise from 2 to 3 percent, and total sales to increase by about 150 basis points less than the same-store sales gain.