Big Chains Offer Mixed Forecasts

Major merchants reported third-quarter earnings Tuesday, led by J.C. Penney, which boosted its fourth-quarter earning forecast, saying it was well positioned for the holiday season.

Saks Inc., which eked out a modest third-quarter profit, projected solid sales for its namesake luxury chain in the fourth quarter.

Off-price retailer TJX Cos., parent of T.J. Maxx and Marshalls stores, reported a 15% profit drop for the third quarter and offered a modest fourth-quarter sales forecast.

The mixed outlook followed a pair of contrasting reports on Monday from Wal-Mart Stores Inc., which offered an upbeat holiday forecast, and Target Corp., which said November sales would miss its projections.

J.C. Penney earned $234 million, or 94 cents a share, in the quarter ended Oct. 29. That is up 57% from net income of $149 million, or 50 cents, a year earlier. Results topped the average forecast of 92 cents a share by analysts surveyed by Thomson Financial.

Revenue edged up 2% to $4.48 billion but fell short of analysts’ forecast of $4.53 billion.

Penney, based in Plano, Texas, credited strong sales of private-label apparel as well as women’s accessories, fine jewelry and home furnishings.

“They have merchandise people want to buy,” said Dave Keuler of Mason Street Advisors, with Penney shares among more than $70 billion in assets. “Their brands clearly resonate with customers.”

J.C. Penney’s stock fell $1.54 to $52.21.

Saks reported net income of $200,000, contrasted with a year-earlier loss of $30.4 million, or 22 cents a share, which included $20 million in charges related to store closings. Wall Street had forecast a loss of 4 cents a share.

Revenue fell 11% to $1.32 billion in the quarter ended Oct. 29, reflecting the sale of the Proffitt’s and McRae’s chains this year.

Saks shares lost 4 cents $18.30.

TJX earned $171 million, or 36 cents a share, for the quarter ended Oct. 29, a 15% decline from $200.9 million, or 40 cents, a year earlier. Analysts expected earnings of 34 cents a share.

The company, based in Framingham, Mass., said warmer weather and weak performance of women’s sportswear hurt third-quarter results.

Revenue rose 10% to $4.04 billion.

Shares of TJX fell 23 cents to $21.90.

Abercrombie & Fitch Co. reported a 79% increase in net income, topping Wall Street estimates. The mall-based retailer raised its profit outlook for the year, as fewer markdowns of its teen-oriented clothing boosted sales.

Third-quarter net income rose to $71.6 million, or 79 cents a share, from $39.9 million, or 42 cents, a year earlier. Revenue rose 35% to $704.9 million.

The strong results marked a shift from a disappointing second quarter. Since then, strong September and October sales of full-priced jeans, graphic T-shirts and fleece have helped boost the stock.

Shares of Abercrombie, based in New Albany, Ohio, rose $1.89 to $58.78 after hours. In regular trading, the stock fell $2.64 to $56.89.

Another retailer focused on the teen market, American Eagle Outfitters Inc., earned $73.3 million, or 47 cents a share, an increase of 26% from $57.9 million, or 38 cents, a year earlier. Wall Street analysts had forecast earnings of 46 cents a share.

The company, based in Warrendale, Pa., said revenue rose nearly 21% to $577.7 million.

American Eagle shares fell $1.14 to $23.21.

Ross Stores Inc. of Pleasanton, Calif., posted slightly lower third-quarter earnings, hurt by inventory-related issues and other items.

Net income fell to $36.3 million, or 25 cents a share, from $37.7 million, or 25 cents, a year earlier. Wall Street analysts on average had forecast earnings of 26 cents a share.

Revenue rose 20% to $1.24 billion.

Ross shares fell $1.09 to $25.19.