J.C. Penney posts profit, but cuts forecast

Dallas J.C. Penney Co. reported a second quarter profit versus break-even results last year, but it cut its full-year forecast blaming the “uncertain consumer climate.” The chain earned $14 million, in line with analyst expectations.

Total sales declined 0.1% to $3.94 billion, which the company said was due to its decision last year to discontinue its Big Book catalogs in 2010. Analysts had forecast sales would be up 1.7% to $4 billion. Same-store sale rose 0.1%. Internet sales rose 4% to $317 million.

J.C. Penney said improvements in its merchandise assortments, including the introduction of new brands, contributed to profitability.

“The success of these initiatives, like our ‘wear now’ strategy, was evident in our performance during the important appointment shopping periods and by the solid growth in profitable sales, particularly in regular and promotional priced merchandise throughout the second quarter. This strength was partially offset, however, in the final weeks of the quarter, by the non-comparable and short-term impact of tactical changes we are making in our clearance and catalog selling strategies. Over time, we are confident that these changes will position us to drive even higher levels of profitable sales,” said Myron E. (Mike) Ullman, III, chairman and CEO.

J.C. Penney said it now expects to earn full-year profit in the range of $1.40 to $1.50 a share, below its earlier forecast to earn $1.64 a share this year.

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