Buying Slump Hurts Penney, May Stores’ Profits : Retailers: Both firms’ net income fell in the fourth quarter. Wal-Mart earnings, however, were a quarterly record.

The slump in consumer spending during the fourth quarter took a toll on earnings at J. C. Penney Co. and May Department Stores Inc., as both retailers reported Thursday that their profits fell during the quarter.

However, Wal-Mart Stores Inc., the leader of the nation’s discounters, showed a record fourth-quarter profit of $481.84 million, an increase of 13%.

Penney, the nation’s fourth-largest retailer, reported a fourth-quarter net income of $206 million, off 44% from $367 million. Revenue was $5.53 billion, compared to $5.52 billion a year earlier.

For the year ended Jan. 26, 1991, Penney’s net income was $577 million, off 28% from a year earlier. Revenue was $17.41 billion, compared to $17.06 billion in 1989.

The sharp drop “reflected the recessionary economy and its impact on the sales performance of stores and catalogue,” Chairman William R. Howell said.

The company faced a drop-off in sales, inflation particularly in women’s apparel and jewelry and stepped-up promotional costs in a “very uncertain retail environment,” the company said.

“Despite the continuing weak consumer demand in 1991, we believe J. C. Penney is well positioned to resume its pattern of sales and earnings growth as soon as the recession clouds lift and consumers once again display confidence in their own and the country’s economic well-being,” Howell said.

Analysts said Penney recently completed a restructuring to upgrade its merchandise mix, but that strategy ran head-on into the drop in consumer confidence caused by the recession and the Gulf conflict.

May Department Stores’ fourth-quarter net income was $252 million in the 13 weeks ended Feb. 2, 1991, off 11% from a year earlier. Revenue for the period was $3.28 billion, compared to $3.24 billion.

For the year, May posted net income of $500 million, up from $498 million the previous year. Revenue was $10.07 billion, compared to $9.6 billion.

May, which last year acquired Thalhimers stores in the Southeast, operates Hecht’s, Lord & Taylor, Filene’s and other department stores, as well as Payless ShoeSource stores, the nation’s largest string of self-service shoe stores.

Wal-Mart Stores earned $481.8 million in the three months ended Jan. 31, 1991, compared to $425.9 million in the same period last year. Revenue was $10.44 billion, compared to $8.16 billion.

For the year, Wal-Mart had a net income of $1.29 billion, up 19% from $1.08 billion the previous year. Yearly revenue was $32.86 billion, compared to $25.99 billion.

Analysts say the company, based in Bentonville, Ark., has found a formula of success by locating discount stores in and near small cities and towns, catering to a rural market in 29 states.