Net income for 2009 totaled $251 million, only 44% of what Penney earned the previous year, on slightly lower revenue of $17.6 billion. Sales for the year declined 5% overall, while comparable store sales fell 6.3%. In the fourth quarter, net income was down 5.2% over the year to $200 million, impacted by pension plan expenses, on 3.6% lower sales of $5.5 billion.

"Our disciplined approach to inventory planning, promotions and SG&A served us well, particularly in the fourth quarter with a planned lower sales volume," Mike Ullman, Penney chairman and CEO, stated in a release. "As a result, we were able to achieve new peak gross margin levels for the year, which led to better-than-expected profitability and cash flow generation."

Ullman added that Penney's focus for fiscal 2010 will be to drive top-line growth as the chain leverages its position with affordable fashion and exclusive brands. "We see opportunities where the customer is responding," he said during a Friday morning earnings conference call.