Nov 14, 2008
JC Penney third-quarter profit falls 53 percent
Nov 14, 2008
* Q3 profit 55 cents a share, down 52.9 pct
* Q3 sales $4.3 billion, down 8.7 pct
* Sees worsening results rest of the year
* Shares indicated lower (Recasts first paragraph, adds inventory, details)
NEW YORK, Nov 14 (Reuters) - Retailer J.C. Penney Inc on Friday said quarterly profit fell nearly 53 percent and warned of worsening results for the rest of the year, just weeks before the crucial holiday shopping season begins.
The mid-tier department store operator forecast fourth-quarter earnings of 90 cents to $1.05, much lower than analyst expectations of $1.33 per share, according to Reuters Estimates.
The Plano, Texas-based company said it expects total fourth-quarter sales to fall 7 percent to 9 percent and sales at stores open a least a year, a key retail metric, to drop 9 percent to 11 percent.
Penney said it expects the rough economic conditions to continue well into 2009.
Sales and profits have suffered in recent months and took a turn for the worse in October as shoppers focused on essential purchases because of falling housing values, tight credit and worries about job security.
Penney's holiday warning is similar to those of Kohl's Corp and Nordstrom Inc . Both department stores reported sharply lower quarterly profits on Thursday and cut their forecasts for the rest of the year.
QUARTERLY PROFIT FALLS BY MORE THAN HALF
Penney's net income fell to $124 million, or 55 cents per share, for its fiscal third quarter, ended Nov. 1, from $261 million, or $1.17 cents per share, a year earlier.
Analysts had expected a profit of 54 cents on revenue of $4.34 billion.
Sales fell 8.7 percent to $4.32 billion, and sales at stores open at least a year, or same-store sales, fell 10.1 percent in the quarter.
Last week, Penney said October sales at stores open at least a year fell 13 percent.
Penney said quarterly inventory was 9 percent below last year's levels on a comparable store basis and gross margin fell to 38.5 percent of sales, compared with 39.7 percent in last year's quarter, as softer sales forced Penney to cut prices to clear out merchandise.
Women's and children's apparel and family shoes sold best in the quarter, while home and fine jewelry continued to be weak.
Internet sales fell 0.3 percent, compared with an 11.8 percent increase in last year's quarter.
Penney said it had cash and short-term investments of $1.6 billion and long-term debt of $3.5 billion as of Nov. 1.
Penney shares have lost 56 percent of their value this year, more than the 35 percent drop this year in the Standard & Poor's retail index . (Reporting by Sarah Coffey; Editing by Steve Orlofsky)
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