J.C. Penney has reported better-than-expected second-quarter results, as cost control helped offset lower spending on apparel by its customers. Net profit at the third-largest US department-store chain fell 36% to $117m (52 cents a share), From $182m (81 cents) last year. Sales were also down 2.5% year-on-year to $4.28bn, while same-store sales fell 4.3%.

The retailer said consumers compensated for higher food and gasoline prices by buying less for their homes and wardrobes. It said it reacted by cutting down costs and boosting sales of denim and back-to- school apparel from J.C. Penney's new clothing lines. It noted that it sold more marked-down merchandise, trimmed expenses and experienced “better-than- expected” demand in July for some new brands.

The company also announced the introduction of a frequent-shopper programme, which will have the attendant point-savings and redemption features. It also plans to revise the prices and design for some of its American Living merchandise (designed by Polo Ralph Lauren Corp). President Ken Hicks noted that the range “faces the same challenges we've been experiencing with the rest of our business, with our initial buys having taken place before the environment started to significantly deteriorate”.

The company said its third-quarter profit may be 70 to 75 cents a share, while same-store sales may decline in the “mid-single digits” on a percentage basis.

NamNews - Monday 18th August 2008

 

See column on the right for related news items
or search our NamNews Archive containing over 9 years of industry news (Subscriber-only)