Operating profits for locally based J.C. Penny Co. Inc. rose 24.1% to a record $504 million during third quarter. Total department store sales rose 7%, comp department store sales were up 5.2%, and internet sales spiked 27% compared with the same quarter a year ago.
Private label brands and the opening of 25 new stores during the quarter were significant contributors to the rise in fortune. Of the 25 new units, 22 were in off-mall locations, a strategy the chain will continue to pursue.
Plans call for 50 new stores a year during 2007, 2008 and 2009, said Mike Ullman, chairman and CEO, during a conference call. The majority will be in off-mall locations. The company will remodel 70 existing units in 2007, he said. Penney has made $560 million in capital investments this year, and plans a total of $800 million by year-end.
East 5th, a new brand in women's, joined the company's private label roster this quarter along with X-Games, Vans and Stevies in children's. Sephora, a store-within-a-store, was added to an initial five stores and online during the quarters. Ullman said private labels outperformed others. Ambrielle, a new private label lingerie brand will make its debut in spring 2007 along with two new lines with Liz Claiborne.
Ullman said sales increased across all categories, all regions and all channels. "The strongest categories in stores were children's and men's apparel and family shoes. The strongest at jcp.com were women's apparel, home and family shoes," he said. This quarter 35,000 new point-of-sale terminals were installed, which allow salespeople to connect with the company's internet site to provide customers with access to all of the company's merchandise.
Heading into the holiday fourth quarter, management anticipates mid-single-digit increases in total department store sales with about $150 million related to the 53rd week this fiscal year. Comp store sales are expected to rise by low single digits. Direct sales, which includes catalogs and the internet, are projected to have increases in the mid-single digits with approximately $50 million related to the 53rd week.
The record third-quarter performance, Ullman said, "reflects our continued success in executing our long range plan initiatives. Our private and exclusive brands are growing in importance, clearly differentiating JC Penney in the eyes of the consumers."
As of Oct. 28, J.C. Penney Corp. Inc., operated 1,037 JC Penney department stores throughout the US and Puerto Rico.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
