JCPenney Doubles 1st Quarter Income, Raises Full Year Guidance

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Plano,TX–JCPenney Co. reported today that its first-quarter net income more than doubled as the department store  benefited from sales improvements across most types of merchandise and tighter controls on inventory.

The retailer raised its full-year guidance on Friday, but even the higher forecast and the second-quarter outlook was muted as its consumers remain “concerned about their budgets.”

Net income of $60 million, or 25 cents per share, for the quarter ended May 1. That is up from a profit of $25 million, or 11 cents per share, on revenue of $3.88 billion during the same period last year. Based on these results, the company said its earnings lifted 140%. The company’s 25-cent-per-share earnings are in line with the average analyst estimate for the retailer.

Penney said six of the seven merchandise divisions had revenue gains. The strongest areas were men’s, shoes and handbags and children’s.

“The first quarter marked a solid start to the year for JCPenney as customers responded well to the steps we have taken to reinforce our style authority with fashion sensibility, head-to-toe looks and promotions that made what we had to offer highly affordable…At the same time, the disciplined approach to managing our business allowed us to deliver strong gross margins, even as we work to increase our top line,” says Myron E. “Mike” Ullman, III, chairman and ceo.

Launches for Fall/Back-to-School

“We know that our customers remain concerned about their budgets, however they respond well to merchandise that’s new and trend-right at compelling prices. Our assortments are strong for the upcoming key appointment shopping periods, including Back-to-School,” adds Ullman.

During the first quarter, JCPenney opened 38 Sephora shops inside JCPenney stores and improved its gross margin rate 90 basis points. This fall, the store plans to launch the Liz Claiborne brand in 30 merchandise categories, as well as MNG by Mango.

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