Penney Profit Rises 65% on Clothing Sales, Tax Gain

J.C. Penney Co. said Thursday that fourth-quarter profit surged 65% on holiday sales of clothing and a tax gain.

Net income rose to $551 million, or $2.34 a share, helped by a $101-million tax benefit. A year earlier, profit was $333 million, or $1.17. Sales climbed 4.2% to $6.2 billion, Plano, Texas-based J.C. Penney said.

Sales at stores open at least a year, an important measure of retail health, rose 2.6% after J.C. Penney expanded private-label apparel brands and Chief Executive Myron Ullman upgraded merchandise to win holiday shoppers. Internet and catalog sales gained 3.7% and surpassed $1 billion for the first time last year. The company also raised its dividend and said it might buy back as much as $750 million of its stock.

Profit from continuing operations, which does not include businesses that were or are being closed or sold, was $1.71 a share without the tax gain.

The average of analysts surveyed by Thomson Financial was for $1.63.

J.C. Penney forecast first-quarter profit of 80 cents a share and full-year net income of $4.14 to $4.24.

Shares of J.C. Penney jumped $1.22, or 2.2%, to $57.85.