JCPenney breaks even, raises FY outlook

PLANO, Texas JCPenney broke even its second quarter, with earnings of 0 cents pe share compared with earnings of 52 cents per share last year. According to the company, second-quarter earnings were impacted by a pre-tax negative swing in non-cash qualified pension plan expense of $106 million, or 28 cents per share after-tax, compared to last year’s second quarter. Net income for this year’s second quarter was a loss of $1 million versus income of $117 million last year.

Total sales in the second quarter decreased 7.9% compared with last year, while comparable-store sales decreased 9.5%, the company reported. JCPenney said the strongest merchandise results were in shoes and women’s apparel, and geographically, the best performance was in the Southwest region of the country. The weakest results were in children’s apparel and in the Southeast region.

“JCPenney’s financial performance in the second quarter shows that our strategy to navigate the current, very difficult consumer climate is working and will continue to position us well over the near and longer term. Our stepped up style along with the quality and value that have become synonymous with the JCPenney brand allowed us to compete as one of the strongest anchors in the nation’s malls, where we are customers’ value destination,” said Myron Ullman, III, chairman and chief executive officer of JCPenney.

In view of its better-than-expected second quarter operating results and expectations for further gross margin improvement in the second half, management has raised its 2009 full year earnings guidance to a range of 75 cents to 90 cents per share. This guidance updates the previous range of 50 cents to 65 cents per share provided with the company’s first-quarter earnings release.

For the third quarter, JCPenney expects total sales to decrease 3% to 5%, comparable-store sales to decrease 5% to 7% and earnings per share to be in the range of a loss of 5 cents to earnings of 5cents per share.