J.C. Penney May Buy Carson’s
Dallas, There is increasing speculation that J.C. Penney could be the buyer of Sak’s Carson Pirie Scott department store chain, according to a report in today’s Chicago Sun-Times. Saks is selling Carson’s, along with Bergner’s, Boston Store, Herberger’s and Younkers, in order to focus on its more lucrative Saks Fifth Avenue chain. Another possible buyer for Carson’s is Belk, Inc., which bought Saks’ Proffitt’s and McRae’s stores for $622 million, according to the report. The paper also speculated that Penney might want to purchase Carson’s to defend itself against a hostile takeover by private equity firms.
Despite the lagging mid-priced sector, J.C. Penney’s earnings more than tripled for the first quarter, boosted by sharply higher Internet sales and increased comp-store sales.
Bitter Break Up for Sears and IT Service
New York City, Sears, Roebuck & Co.’s massive IT outsourcing contract with Computer Sciences Corp. to manage its computer and phone networks and Web sites has descended into finger-pointing and acrimony. Computer Sciences has said the retailer ended the $1.6 billion contract to avoid paying millions in termination fees. Previously, Sears said that it canceled its 10-year deal with Computer Sciences because the contractor failed in certain duties, charges that Computer Sciences denies. A federal judge denied Computer Sciences’ suit to stop Sears from ending the contract for cause, Sears said Friday.
Tuesday Afternoon Earnings Roundup
Atlanta, The Home Depot posted net earnings of $1.2 billion in the first quarter, up 16.3% from the year-ago period. Sales grew 8.1% to $19 billion on same-store sales growth of 2.1%.
• J.C. Penney Co. reported income from continuing operations of $172 million in the first quarter, more than triple the $41 million it posted in the year-ago period. Sales rose 3.9% to $4.19 billion on the strength of 3% comps growth.
• Staples Inc. posted first-quarter net income of $159 million, up 26.8% from the year before. Sales increased 13% to $3.9 billion on same-store sales growth of 4%.
• The TJX Cos. posted an 11% fall in first-quarter net income to $149.3 million. The decline came despite a 9% improvement in net sales to $3.7 billion and comps growth of 3%.
• BJ’s Wholesale Club Inc. recorded first-quarter net income of $18.6 million, up 15.5% from the same quarter a year before. Sales increased 9.8% to $1.8 billion on a comps improvement of 5.8%.
• Barnes & Noble Inc. recorded a 37% increase in net earnings from continuing operations to $9.9 million in the first quarter. Sales rose 4% to $1.1 billion on same-store sales growth of 2.2%.
• Dick’s Sporting Goods Inc. posted net income of $12.2 million in the first quarter, up 15.1% from the year-ago period. Sales grew 57% to $570.8 million, due to 3.2% same-store sales growth and the addition of the recently acquired Galyan’s chain.
• The Cato Corp. reported first-quarter net income of $18.4 million, up 9.5% from the same quarter a year before. Sales grew 5% to $215.1 million. Same-store sales remained flat.