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Profit Falls at Penney, Limited, Nordstrom

From Associated Press

J. C. Penney Co., Limited Inc. and Nordstrom Inc. said Tuesday that their third-quarter earnings fell from depressed levels of a year earlier, while May Department Stores Co. said profit edged up 1%.

The results provided further evidence of the consumer spending slump that has sliced the earnings of many stores. A predicted rebound in spending hasn’t happened because consumers are weighed down by concerns about the economy and their jobs.

Penney, Nordstrom and May also reported earnings declines in the third-quarter of 1990, in the early months of the Persian Gulf crisis and recession. Limited’s results were little changed during that period.

* J. C. Penney Co.: Penney said it earned $116 million, or 93 cents per share, in the quarter ended Nov. 2, down 12.9% from $134 million, or $1.07 per share, in the same period a year earlier.

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Revenue fell to $4.2 billion from $4.25 billion.

Penney attributed its earnings decline to the drop in sales. The consumer spending drought has taken a heavy toll on the company, which was in the process of making its product line more upscale when the recession hit. The company said it was able to reduce expenses during the quarter.

In the third quarter of last year, Penney’s earnings plunged nearly 36%.

* Limited Inc.: The nation’s largest specialty apparel retailer said earnings in the quarter ended Nov. 2 fell 14% to $72.9 million, or 20 cents per share, from $84.9 million, or 23 cents per share, in the third quarter last year.

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Sales rose to $1.43 billion from $1.25 billion.

Chairman Leslie H. Wexner noted the weak economy and slow store traffic during the quarter, but said “external factors are not an excuse for such mediocre performance.”

“I believe it is always our merchandising that produces success or failure,” he said.

The company’s flagship Limited division, which has undergone a restructuring, struggled during the quarter.

* Nordstrom Inc.: The apparel retailer earned $19.4 million, or 24 cents per share, in the quarter ended Oct. 31. That was down 4.9% from $20.4 million, or 25 cents per share, in the third quarter of 1990, when earnings fell 7%.

Sales rose to $687.1 million from $634.9 million.

The company said its sales growth rate slowed during the third quarter after improving in the first half of its fiscal year. The trend reflected the slowdown in consumer spending.

* May Department Stores Co.: May earned $91 million, or 70 cents per share, in the quarter ended Nov. 2, up 1.1% from $90 million, or 69 cents per share, in the same period of 1990.

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Revenue rose to $2.56 billion from $2.36 billion.

A year ago, May’s earnings fell 7.2%. The slight gain in the latest quarter means that the company continues to struggle, but because it kept costs in line, it avoided the profit declines other retailers suffered.

Department stores have been particularly hard hit by the slide in consumer spending.

The May department store chains include May, Lord & Taylor, Filene’s and Hecht’s. It also owns Payless ShoeSource stores.

Earnings, D4


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