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JCPenney reports 2Q earnings growth


PLANO, Texas JCPenney Co. reported earnings per share from continuing operations for the second quarter ended Aug. 4, rose to 78 cents per share, compared to 75 cents per share in last year's second quarter.

"Our second quarter performance speaks to the strength of our strategies to make a deep connection with our customers and drive growth in our business, even in what has been a challenging retail environment," said Myron Ullman III, chairman and ceo of JCPenney. "The back-to-school selling season is off to a good start, reflecting the ongoing enthusiasm America's families have for the great style and quality we offer at a smart price. We are also pleased by the positive response we have seen to our new private lingerie brand Ambrielle and our exclusive Liz & Co. and CONCEPTS by Claiborne lines. They all bring newness and excitement across our shopping channels, including our growing store base and industry-leading Web site, "

Second quarter operating income was $329 million, a 17.5% increase from last year's $280 million. Total company sales increased 3.6% and comparable-store sales increased 1.9%. According to the company, the strongest merchandise results were in children's and women's apparel, with the best performances in the Northwestern and Southwestern regions of the country.

Consistent with original guidance, management continues to expect that gross margin and SG&A patterns will vary by quarter, with both expected to improve for the full year. Management is increasing guidance for full-year earnings from continuing operations to $5.50 per share compared to previous guidance of $5.49 per share.

  The company reported that due to last year's 53rd week, third quarter sales will vary by month from last year's sales pattern, with a significant benefit expected in the October period due to the timing of reporting of events in the fiscal calendar. The company expects total department store sales to increase in the low- to mid- single digits and  comparable-department store sales to increase in the low-single digits. Earnings per share are expected to be approximately $1.28 in the third quarter. Management expects earnings of $2.41 per share in the fourth quarter, with improvement in both gross margin and operating expenses.

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