Plano, Texas J.C. Penney said a pullback in consumer spending has cut its first-quarter profit in half, and predicts "difficult" conditions for the entire year.
The company reported a 50% drop in quarterly profit on Thursday. Penney also reported a net income of $120 million for its fiscal first quarter ended May 3, compared with $238 million a year earlier.
Total sales fell 5% to $4.13 billion from $4.35 billion.
"Our financial performance in the first quarter was clearly impacted by the weakened consumer environment," said Myron E. Ullman III, chairman and CEO. “Looking ahead, we will continue to take the necessary actions to align our business plans with the expectation that conditions will remain difficult for the remainder of 2008. Accordingly, inventory will be managed through appropriate pricing actions on existing merchandise and by reducing our future merchandise commitments to better balance our inventory position with expected sales levels.”