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Profits Rise at J.C. Penney, Limited

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From Associated Press

A strong finish to the holiday season lifted fiscal fourth-quarter profits at J.C. Penney Co. and Limited Brands Inc. as shoppers used gift cards to snatch up clearance items and spring merchandise last month.

The results echoed an upswing at discount giants Wal-Mart Stores Inc. and Target Corp., which last week returned better-than-expected quarterly earnings -- trampling concerns that deep holiday discounting would erode bottom-line figures.

Reporting after the stock market closed, discounter Kohl’s Corp. also topped analysts’ projections with earnings of $324.9 million, or 94 cents a share, on $4.08 billion in sales, versus $244.8 million, or 71 cents a share, on sales of $3.56 billion a year earlier.

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Plano, Texas-based J.C. Penney said a wider gross margin bulked up its profit in the latest quarter, when lackluster sales during the early half of the gift-buying season sent retailers into a panic. In December, sales at its department stores open at least a year, known as same-store sales, reversed course to gain 3.3% in January. Analysts had expected a decline.

Stellar post-holiday sales at Victoria’s Secret and Bath & Body Works helped Limited post a healthy quarterly profit. Last month, Limited’s chains -- which include Express and Limited stores -- saw same-store sales soar 9%.

J.C. Penney shares fell 5 cents to $44.10 on the New York Stock Exchange, while Limited shares dropped 42 cents to $23.30. Kohl’s shares fell 30 cents to $45.90 before the earnings report was released.

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The fiscal quarter for all three ended Jan. 29.

J.C. Penney swung to a profit of $333 million from a year-earlier loss of $1.07 billion, when results were saddled by problems at its former Eckerd chain.

For the year, J.C. Penney earned $524 million, or $1.76 a share, versus a loss of $928 million, or $3.13, in 2003. Revenue rose 4% to $18.42 billion.

Columbus, Ohio-based Limited’s fourth-quarter profit rose to $415.8 million, or 95 cents a share, from $387.6 million, or 74 cents, the previous year. Analysts were looking for income of 90 cents a share.

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Sales grew 3% to $3.33 billion, with combined same-store sales climbing 2% during the period. Full-year income was $738.7 million, or $1.54 a share. That compares with a profit of $716.8 million, or $1.36 a share, in 2003. Sales of $9.41 billion were 5% higher than $8.93 billion in 2003.

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