Despite an increase in sales, J. C. Penney & Co. said Thursday that net income for the fourth quarter fell 16.6% from a year ago, pulling full-year profits down 6.9% from 1983. The New York-based retailer attributed the decline to heavy markdowns and other expenses incurred during the crucial Christmas selling season.
"Although our 1984 results were disappointing, we are confident that our repositioning strategy of providing our customers with a more fashionable mix of merchandise and a more exciting shopping environment will lead to an improved performance as the year progresses," Chairman William R. Howell said in a statement.
Like other major retailers across the country, Penney had to resort to heavy promotions and price-cutting when an expected holiday surge in sales failed to materialize and led to bulging inventories. Analysts have long projected that the industrywide price-cutting would take its toll on the fourth-quarter and full-year profits of major retailers.
For the three months ended Jan. 26, Penney had net income of $216 million, down from $260 million in the same period last year. Sales, however, rose 6.3% to $4.43 billion.
For the full 52-week year, net income declined to $435 million from $467 million. Sales rose 11.4% to $13.45 billion.
Howell said that inventories at year-end were about "10% over plan" but are expected to be back in line by the end of the first quarter.