J.C. Penney 2Q Sales Down Slightly After Closing Catalog Biz Aug 23, 2011

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U.S. department store retailer J. C. Penney Company, Inc., seller of electric housewares, floor care, and personal care appliances, reported net income of $14 million for its second quarter ended July 30, 2011. The chain showed 1.5% comparable store sales growth for the second quarter and 2.7% same store sales growth for the first half of the year.

Comparable store sales for the second quarter rose 1.5%. Total sales decreased 0.8%, reflecting J. C. Penney's exit from its catalog business. Internet sales through jcp.com were $326 million in the second quarter, increasing 2.8% over last year. The retailer said its strongest merchandise results in the period were in women's apparel and accessories and fine jewelry. Geographically, the best performance was in the southwest region of the country.

Compared to the peak margins achieved in last year's second quarter, gross margin decreased approximately 110 basis points to 38.3% of sales, reflecting a softer selling environment early in the quarter and the resulting higher level of promotional activity. Gross margin decreased $55 million, or approximately 3.5%, compared to last year's second quarter.

The Company's 2011 third quarter guidance:
• Comparable store sales are expected to increase 2% to 3%.
• Total sales are expected to increase approximately 250 basis points less than comparable store sales due to Penney's exit from the catalog business.

J. C. Penney operates over 1,100 jcpenney department stores in the United States and Puerto Rico, as well as apparel and home furnishing site jcp.com.

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