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J.C. Penney Posts Quarterly Profit

August 18, 2004|From Associated Press

Department store operator J.C. Penney Co. eked out a small profit in its fiscal second quarter, compared with breaking even in the year-earlier period.

The company said Tuesday that it earned $1 million, or 2 cents a share, in the three months ended July 31. The latest results included operating losses from the Eckerd drugstore business, which Penney sold during the quarter.

Excluding results from Eckerd, Penney said it earned $72 million, or 23 cents a share, contrasted with a loss of $3 million, or 3 cents, a year earlier.

The results matched the forecast of analysts surveyed by Thomson First Call.

Revenue rose 6% to $3.86 billion and slightly beat analysts' expectations.

Same-store sales, or sales at stores open at least a year, rose 7% at the department stores, Penney said. Same-store sales are considered the best indicator of a retailer's health.

Chairman and Chief Executive Allen Questrom said early back-to-school sales were "exceeding our expectations."

He added that although higher oil prices and fear of terrorism could damp consumer spending, "we remain confident that our third-quarter sales and operating profits will improve."

The Plano, Texas-based company, however, reduced its estimate of third-quarter profit to 35 cents to 40 cents a share, citing charges of 11 cents a share due to early retirement of debt. However, the projections are still in line with analysts' forecast of 37 cents a share.

The company announced this month that it would use $3.5 billion in proceeds from selling Eckerd and $1.1 billion in cash to pay off debt early and buy back shares of its stock.

Shares of J.C. Penney fell 27 cents to $38.48 on the New York Stock Exchange.

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