J.C. Penney Q3 profit plummets 78%, raises outlook

Plano, Texas J.C. Penney Co. reported Friday that its profit plummeted 78% to $27 million, compared with $124 million in the year-ago period.

However, results were significantly better than initial expectations and the retailer has raised its outlook for earnings and comp-store sales for the full year.

For the quarter ended Oct. 31, sales dropped 3.2% to $4.18 billion. Comp-store sales declined 4.6%.

“Third-quarter results reflect the success of our strategy to balance top line performance with bottom line profitability,” said Myron E. (Mike) Ullman, III, chairman and CEO of J.C. Penney. “Our ability to deliver earnings above original expectations resulted from better-than-expected improvement in gross margin as we have maintained appropriate inventory levels and reduced both clearance selling and unprofitable discounting.”

During the third quarter, the company opened three new stores, all in the off-mall format. These openings completed the 2009 new store program and brought the total of new and relocated stores for the year to 17. The company also added 12 Sephora locations inside its stores, bringing the total to 155 locations.