J.C. Penney Co. and Kohl's Corp. on Thursday reported third-quarter profit gains and raised earnings forecasts.
Net income at J.C. Penney, the third-largest U.S. department store company, climbed 23% to $287 million, or $1.26 a share. Discount department store chain Kohl's said profit rose 45% to $224.5 million, or 68 cents.
Both companies are luring customers to stores with exclusive brands of clothing, such as J.C. Penney's Ambrielle lingerie and Kohl's Chaps line, as retailers compete for holiday season spending.
Last year 32% of retail stores' profits and 27% of sales came in the fourth quarter.
"They both are just doing exceptionally well right now," said David Heupel, a portfolio manager at Thrivent Financial for Lutherans.
Sales at J.C. Penney rose 6.7% to $4.78 billion, the biggest gain since the quarter through May 2004. Kohl's increased sales 17% to $3.64 billion.
Kohl's reported its earnings after the stock market closed. Its shares declined 51 cents to $72.94 during regular trading and fell 95 cents to $71.99 after hours.
Shares of J.C. Penney advanced $1.35 to $79.55. The stock is up 43% this year, compared with Kohl's 50% increase.
Plano, Texas-based J.C. Penney has 1,037 stores, and Menomonee Falls, Wis.-based Kohl's has 814.
J.C. Penney boosted its fourth-quarter per-share earnings forecast by 10 cents to $1.94.
Chief Executive Myron Ullman has accelerated store openings to encourage more shopper visits, and the company has added its own brands, including X-Games and Van's children's clothing.
Ullman is relying less on discounts and has expanded offerings in items including furniture.
Next year J.C. Penney will introduce two clothing lines by Liz Claiborne.
"We are quite optimistic about the fourth quarter," Ullman said.
"Customers are feeling pretty good about themselves, and now that we have the elections over and there is less acrimony among the political element, we are hoping consumer confidence will improve."
Kohl's said it might earn as much as $3.24 for the full year, up from an earlier prediction of $3.04 to $3.13. The company left its fourth-quarter forecast of as much as $1.42 a share unchanged.