|JCPenney Reports January Sales|
Operating performance during the fourth quarter was impacted by the
extremely promotional environment during the holiday selling season and
weaker than expected sales in the January period. Nevertheless, the
Company was able to manage inventory flow and operating expenses to keep
anticipated earnings within the range of its original expectations.
Management expects earnings for the fourth quarter to be in a range of
The Company finished fiscal 2008 with over
Comparable store sales decreased 16.4 percent for the four-week period
During the month, women’s apparel and family shoes were the best performing divisions, while fine jewelry experienced the weakest results. Geographically, the northwest region was the strongest and the central region was the weakest performing region in January.
“We are successfully addressing the impact of difficult operating
conditions by continuing to execute our Bridge Plan, under which we are
tightly controlling all aspects of our business, while offering
customers newness and excitement in our merchandise assortments,” said
2009 Operating Performance Outlook
For 2009, the Company anticipates weak consumer spending and negative sales trends to continue and is planning for a full-year comparable store sales decline of approximately 10 percent. Total sales are expected to decrease high-single digits. On a year-over-year basis, comparable store inventory levels for year-end 2008 decreased low-double digits. In addition, future inventory receipts for 2009 are also being planned at a low-double digit decrease. With better alignment of inventory, the Company expects a modest improvement in the gross margin rate for fiscal 2009 compared to 2008.
“Our conservative approach to planning 2009, along with a strong balance sheet, positions the Company to deliver value to investors over the long term,” added Ullman. “At the same time, our committed team of engaged associates will continue to execute our compelling value proposition of providing merchandise that reflects the quality and value our customers expect together with the style they desire and the fulfilling shopping experience they deserve.”
As discussed previously, the Company will record an increase in non-cash
pension expense resulting from negative returns on pension plan assets
during the fiscal 2008 period. Based on preliminary estimates for the
value of plan assets and liabilities at the measurement date of
For 2009, the Company will continue to aggressively manage expenses with the same discipline demonstrated during 2008. Anticipated increases associated with new store openings, state and federal minimum wage increases, and other categories subject to increased unit costs are expected to be fully offset by actions taken to reduce spending in other parts of the business. On a dollar basis, apart from the pension expense, the Company expects operating expenses for 2009 to be approximately flat compared with 2008.
In accordance with previous guidance, the Company is planning 2009
capital expenditures of approximately
The Company’s guidance for the four-week period ending
Management will provide additional details regarding its initiatives and
outlook for 2009, as well as guidance for the first quarter on
Conference Call/Webcast Details
In place of its regular monthly pre-recorded sales call, management will
host a live conference call and real-time webcast today,
This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which reflect the Company's current views of future events and financial performance, involve known and unknown risks and uncertainties that may cause the Company's actual results to be materially different from planned or expected results. Those risks and uncertainties include, but are not limited to, general economic conditions, including inflation, recession, unemployment levels, consumer spending patterns, credit availability and debt levels, changes in store traffic trends, the cost of goods, trade restrictions, changes in tariff, freight, paper and postal rates, changes in the cost of fuel and other energy and transportation costs, increases in wage and benefit costs, competition and retail industry consolidations, interest rate fluctuations, dollar and other currency valuations, risks associated with war, an act of terrorism or pandemic, and a systems failure and/or security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or Company information. Please refer to the Company's most recent Form 10-K and subsequent filings for a further discussion of risks and uncertainties. Investors should take such risks into account when making investment decisions. We do not undertake to update these forward-looking statements as of any future date.
J. C. Penney Company, Inc.
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