Penney Posts $1.07-Billion Loss

J.C. Penney Co., the second-largest U.S. department store, reported a fiscal fourth-quarter loss Thursday after writing down the value of its Eckerd drugstore chain, and rival Kohl’s Corp. said profit fell 12% for a third straight quarterly drop after the retailer had to increase discounts to clear out leftover merchandise.

Specialty retailers Limited Brands Inc. and Liz Claiborne Inc., which is also a major supplier, said quarterly profit rose as recent acquisitions boosted sales.

Plano, Texas-based J.C. Penney posted a net loss of $1.07 billion, or $3.42 a share, compared with profit of $202 million, or 68 cents, a year earlier. Revenue excluding sales from the Eckerd chain in the period ended Jan. 31 increased 6.2% to $6.1 billion, the biggest gain in at least seven years.

The write-down came after Chief Executive Allen Questrom failed to find a buyer for the chain, which was put up for sale in October.

“This says they’re confident it’s gone, even if they don’t have a definitive agreement,” said Dimitri Kuriloff, director of research at New York-based Capital Management Associates, whose $1 billion in assets include J.C. Penney shares. “I don’t mind taking the write-down. You’ve got to get it out of the way.”

Shares of J.C. Penney rose $1.24 to $31 on the New York Stock Exchange.

Kohl’s, a low-price department-store chain, said fourth-quarter net income fell to $246.8 million, or 72 cents a share, from $279 million, or 81 cents, a year earlier. Sales in the three months ended Jan. 31 rose 12% to $3.56 billion, the Menomonee Falls, Wis.-based retailer said. Sales at stores open at least a year fell 2.1%.

Kohl’s ordered too much clothing for the holiday season, cluttering the stores and leading to discounts of as much as 80%. Sales at stores open at least a year have declined in six of the last 12 months.

Profit will be 32 cents to 34 cents a share in the first quarter as same-store sales rise 2% to 4%, CEO Lawrence Montgomery said. Profit will rise to $2.13 to $2.21 this year. Analysts surveyed by Thomson First Call expect profit of 35 cents in the first quarter and $2.12 for the year.

Kohl’s shares rose 94 cents to $50.50 on the NYSE.

Limited Brands, whose chains include Victoria’s Secret, Bath & Body Works, Express and Limited, said fourth-quarter profit rose 9.9% as shoppers bought more holiday gifts at its Victoria’s Secret stores and the company sold more clearance merchandise. Net income increased to $387.6 million, or 74 cents a share, from $352.9 million, or 66 cents, a year earlier. The results matched estimates.

Columbus, Ohio-based Limited’s sales in the quarter ended Jan. 31 rose 8.8% to $3.23 billion, the biggest percentage gain in 18 quarters. Shares fell 9 cents to $20.11 on the NYSE.

The retailer said first-quarter earnings would be unchanged from the year-earlier quarter, when it earned 9 cents. That compares with an average forecast of 13 cents a share by 13 analysts.

Liz Claiborne, the maker of Liz Claiborne, Sigrid Olsen and other brands, said fourth-quarter earnings increased 26%, lifted by acquisitions including Juicy Couture.

Net income rose to $73.1 million, or 66 cents a share, from $58 million, or 54 cents, a year earlier when it had store-closing costs. Sales rose 3.6% to 1.03 billion.

New York-based Liz Claiborne said this year’s profit may rise to $2.70 to $2.77 a share. Nine analysts surveyed by Thomson First Call expected an average of $2.78.

Liz Claiborne shares fell 76 cents to $36.83 on the NYSE.