3 Major Retail Chains Report Mixed Results
J. C. Penney Co. said Tuesday that its third-quarter earnings rose 47.6% as the company continued to shift its emphasis from general to fashion retailing.
Penney also said it had agreed to sell its Belgian operations to GB-INNO-BM, Belgium’s largest retailer. Penney did not disclose a price, but said it would incur an after-tax loss of about $16 million on the deal that would be recorded when completed.
Penney said the emphasis on apparel retailing boosted its third-quarter earnings to $171 million from $116 million last year.
The company’s third-quarter sales totaled $3.76 billion, up 7.8%.
Jeffrey B. Edelman, a retail industry analyst with the investment firm Drexel Burnham Lambert Inc., said of Penney’s results, “basically, it was a very good quarter.” He attributed the company’s performance to favorable sales of higher margin apparel items and Penney’s “tight control of expenses.”
Results Expected
Dayton Hudson Corp. reported that its quarterly earnings fell nearly 37%, while Federated Department Stores Co. recorded a 20% increase.
Dayton Hudson said its third-quarter earnings slipped to $33.6 million from $53.1 million a year ago. The 1986 figure does not take into account a one-time charge of $19.7 million for debt redemption.
The company reported sales of $2.54 billion in the third quarter, up 14.4% from a year ago.
Analysts called Dayton Hudson’s earnings disappointing but expected. They said the company continued to suffer because of markdowns in its Mervyn’s apparel stores, but they also noted some of the earnings decline was because of the cost of opening nearly 50 new stores, including 35 in Dayton Hudson’s strongest division, Target discount stores.
Federated said its earnings for the quarter totaled $55.9 million, up from $48.8 million in the same period a year earlier. The 1986 figures do not include a $14.3-million extraordinary charge from debt restructuring.
Sales for this year’s third quarter totaled $2.67 billion, a 6.1% increase a year earlier.
The company owns department stores and discount store groups, including the Burdine’s, Bloomingdale’s and Rich’s chains.
