JCP earnings crap
JCP is up on earnings, which were less than last year and pretty much not good, but the stock is up pre-market because I guess the trading world expected JCP to fall flat on their face. Here’s the Dow Jones news on the earnings: J.C. Penney Co.’s (JCP) fiscal fourth-quarter net income fell to $430 million, or $1.93 a share, from $477 million, or $2.09 a share, a year earlier.
The Plano, Texas, retailer said net sales for the quarter ended Feb. 2 decreased to $6.39 billion from $6.66 billion, while comparable-store sales, or sales of stores open at least a year, fell 2.3%.
On average, analysts polled by Thomson Financial expected per-share earnings of $1.77 on revenue of $6.39 billion.
J.C. Penney projects fiscal first-quarter earnings of 75 cents to 80 cents a share and fiscal 2008 earnings of $3.75 to $4 a share.
The company expects sales to increase slightly in the first quarter and increase in the low-single digits for the full fiscal year.
J.C. Penney shares closed Wednesday up $1.56, or 3.4%, at $47.95.
Will I just eat it and sell for whatever I can get on this? Maybe… maybe not. Today will be a day of selling for me, based on my only previous rule: I’m going to wait for two days after getting an option. Unless something huge happens and I need to sell, I think this will allow me to avoid the emotional outburst of selling at the wrong time.
At least, that’s the current hope.
UPDATE:
J.C. Penney Co. (JCP) reported a 9.9% drop in fiscal fourth-quarter net income, citing a weak consumer-spending environment as its middle-market customers continue to cut back their spending, leading the company to increase its promotional levels and in-season clearance activities.
The company also projected first-quarter and fiscal-year earnings largely below analysts’ expectations.
For the quarter ended Feb. 2, the department-store chain posted net income of $430 million, or $1.93 a share, down from $477 million, or $2.09 a share. Earlier this month, Penney said it expected earnings at the high end of its reduced forecast of $1.65 to $1.80 a share.
At that time, Penney also said revenue for the quarter fell 4.1% to $6.39 billion, as the year-earlier period had an extra week. Same-store sales fell 2.3%, the company said Thursday, better than projections for a mid-single-digit decline.
Gross profit margin dipped to 36.2% from 38%, reflecting a weak consumer-spending environment that led to increased promotional levels and in-season clearance activities. The margin was expected to decline.
Penney said the quarter’s strongest merchandise results were in women’s and children’s apparel, while fine jewelry and big-ticket home categories were the weakest. The Northeast shined, while the Southeast lagged.
Looking ahead, the firm projected fiscal first-quarter earnings of 75 cents to 80 cents a share on sales increasing “slightly.” On average, analysts were expecting earnings of 80 cents a share on a 1% decline in revenue to $4.3 billion.
For the year, earnings are seeing coming in between $3.75 to $4 a share on sales growth in the low-single digits. Analysts’ mean estimates were for earnings of $4.02 a share on a 1% rise in revenue to $20.1 billion.
Same-store sales in both periods are seeing falling by the low-single digits.
Chairman and Chief Executive Myron “Mike” Ullman III said, “With no clear indication that the consumer environment will improve during 2008, we have taken a conservative approach to planning our business to maintain a balance between near-term economic realities and our long-term growth opportunities.”
He added the company will remain focused on improving the customer experience and providing “exciting, stylish merchandise at smart prices.”
Battling an old reputation for dowdy fashions, Penney has been updating its once-cluttered department stores with more stylish private brands. A year ago, it rebranded its own lingerie line and introduced two new proprietary labels from Liz Claiborne Inc. (LIZ).
Wednesday, Penney launched its exclusive lifestyle brand American Living by a division of Polo Ralph Lauren Corp. (RL). Ullman has said the brand - which spans 40 categories, from women’s and men’s clothing to home furnishings, shoes and luggage - is expected to be a billion-dollar business in the next few years, accounting for 5% of the department-store chain’s annual sales.
Penney is amid an expansion effort slated to add 175 standalone stores by the end of 2009, moving locations out of integrated shopping malls and expanding square footage as it tries to better compete with rival Kohl’s Corp. (KSS). And in January, the retailer announced plans to merge the buying and marketing operations for store and online sales, cutting as many as 200 jobs in the process.
Shares of Penney closed Wednesday at $47.95 and rose to $49 in recent premarket trading. Penney stock, a strong performer between 2003 and 2007, has waned in the past year as the slowing economy squeezes consumers.
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