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J.C. Penney Boosts Profits

PLANO, TX-Coming off a strong 2004, the department store company seems to be in full turn-around mode.

By Dees Stribling | Updated on February 24, 2005

PLANO, TX-In the wake of a good holiday sales season, J.C. Penney Co. Inc., turned in a strong fourth fiscal quarter (ended Jan. 29), with comp-store sales at its department stores increasing 3% compared with the same period in 2003. The company’s catalog and Internet sales (combined) were up even more, increasing 3.9% over the same period in 2003, and total income from continuing operations increased to $328 million in Q4, compared with $253 million last year.

The quarter also marked a significant turnaround in profitability for the department store company. Q4 2004 operating profit was $581 million or 9.6% of sales, compared with $445 million last year. This represents an increase of nearly 31%, or 230 basis points as a percent of sales. Full year operating profit increased 66% to 7.1% of sales compared with 2003.

“The improvement in our business reflects effective merchandising programs and process improvements,” said Myron Ullman, chairman and CEO of J.C. Penney, during the company’s earnings conference call on Thursday. “These produced appropriate inventories coming out of the holiday season, and we also had a good transition of seasonal products, which is reflected in our strong January and early February results.”

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