JCPenney reports improved profitability

PLANO, Texas JCPenney reported net income of $14 million dollars or 6 cents per share for the quarter ended July 31, compared with break-even earnings per share in last year's second quarter.

"Our focus on operating excellence allowed us to deliver improved profitability in the first half. Moreover, since the beginning of the year, we have been making changes in our merchandise assortments, introducing new brands and offering better style than ever before, in order to increase top line sales. The success of these initiatives, like our "wear now" strategy, was evident in our performance during the important appointment shopping periods and by the solid growth in profitable sales, particularly in regular and promotional priced merchandise throughout the second quarter. This strength was partially offset, however, in the final weeks of the quarter, by the non-comparable and short-term impact of tactical changes we are making in our clearance and catalog selling strategies. Over time, we are confident that these changes will position us to drive even higher levels of profitable sales," said Myron Ullman, III, chairman and chief executive officer.

Comparable-store sales for the quarter increased 0.9% over last year while total sales were about flat, decreasing 0.1%, when compared with last year's second quarter.

The strongest merchandise results were in men's apparel and women's accessories, and geographically, the best performance was in the northeast region of the country, the company reported.

For the third quarter, JCPenney said it is expecting comparable-store sales to increase 2% to 3% and earnings per share to be in the range of 16 cents to 20 cents per share.