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J.C. Penney swings to Q4 profit on tax benefit, but revenue falls

BY Marianne Wilson

New York — In a sign of some progress in its turnaround efforts, J.C. Penney Co. reported a net profit of $35 million for the fourth quarter ended Feb. 1, 2014, compared to a loss of $552 million a year ago. Excluding a tax benefit and other items, Penney had a loss of $206 million for the quarter.

Looking forward, the company expects same-store sales to increase approximately 3% to 5% for the first quarter and to increase mid single digits for the full year 2014.

Net sales for the quarter, ended Feb. 1, 2014, fell 2.6% to $3.78 billion from $3.88 billion in the year-ago quarter, which included an additional 53rd week. Analysts had expected $3.85 billion.

Same-store sales rose 2.0 % for the quarter, with holiday sales up 3%. Online sales were $381 million for the quarter, up 26.3% versus the same period last year, excluding the 53rd week.

The company’s top performing merchandising divisions were home, men’s apparel, women’s accessories and Sephora.

"J.C. Penney achieved what it set out to do on a number of important fronts in 2013,” said CEO Myron Ullman. “We stabilized our business, both financially and operationally, and restored our process disciplines, promotions, inventory levels and focus on the customer. As a result, we generated positive comparable store sales in the fourth quarter and ended the year with more than $2 billion in total available liquidity.”

For the full year, the company reported an operating loss of $1.42 billion, which includes $215 million of restructuring and management transition charges.
Ullman said the retailer’s turnaround is gaining momentum.

"With the most challenging and expensive parts of the turnaround behind us, we will focus on improving gross margin, managing expense and steadily growing our sales in 2014,” Ullman said. “Our strategic plan seeks to enhance performance across all of the key drivers of our business: merchandising, marketing, store experience, jcp.com, our teams, and our operations. The goal is to deliver consistently improving financial results, and to restore J.C. Penney as a leader in American retail."

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The TJX Companies touts successful fiscal 2014

BY CSA STAFF

The TJX Companies CEO Carol Meyrowitz touted the company’s performance in the fourth quarter and fiscal 2014, calling it a successful year despite a competitive retail environment and generally unfavorable weather in many of its regions during the first and fourth quarters.

For the 13-week period ended Feb. 1, net sales were $7.8 billion, a 1% increase over the 14-week prior-year period. Consolidated comparable store sales increased 3% over the prior year on a 13-week comparable basis. Net income was $582 million and diluted earnings per share were $.81 compared with last year’s $.82 per share. Diluted earnings per share increased 9% over last year’s adjusted $.74, which excludes the approximately $.08 benefit from the extra week in the fourth quarter of fiscal 2013.

Net sales for the 52-week fiscal year were $27.4 billion, a 6% increase over the 53-week fiscal period last year. Consolidated comparable store sales increased 3% on a 52-week comparable basis. Net income for the 52-week fiscal year was $2.1 billion, and diluted earnings per share were $2.94, a 15% increase over $2.55 last year. Excluding a third quarter tax benefit of $.11 per share, adjusted diluted earnings per share were $2.83, a 15% increase over the prior year’s adjusted earnings per share of $2.47, which excludes the approximately $.08 benefit from the 53rd week in fiscal 2013.

“We achieved EPS growth of 15% over last year’s adjusted 24% increase, and consolidated comp sales increased 3% over last year’s 7% increase,” said Meyrowitz. “In the U.S., Marmaxx and HomeGoods continued their excellent, consistent performance. We also successfully launched tjmaxx.com, which, along with the smooth transition of Sierra Trading Post into TJX, gives more consumers the ability and convenience to shop our great values 24 hours a day, seven days a week. TJX Canada was in line with our plan for the year and continued to expand Marshalls across that country. TJX Europe delivered another outstanding year, and we could not be more excited about our international growth opportunities! We believe this speaks to the resiliency and flexibility of our off-price model, as we exceeded our long-term plan of 10% to 13% compound annual EPS growth for the fifth consecutive year.”

Meyrowitz said the company has opened the new fiscal year in an excellent position to pursue its near- and long-term opportunities.

“Our inventories are extremely lean, which affords us enormous flexibility to buy into the plentiful opportunities we see in the marketplace for branded merchandise. We have many exciting initiatives planned this year, and above all, will continue to offer consumers amazing values on great fashions and brands. As we approach $30 billion in annual sales, we continue to see tremendous global growth potential for TJX,” she added.

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NRF praises JPMorgan Chase for chip and PIN effort

BY Dan Berthiaume

Washington, D.C. — The National Retail Federation (NRF) is officially recognizing the financial institution JPMorgan Chase & Co. for its decision to issue Europay, Mastercard and Visa (EMV)-compliant payment cards that require customers to enter a personal identification number (PIN), as well as store their personal data in an encrypted microchip.

Previously, JPMorgan Chase has issued EMV-compliant cards that require a customer signature, rather than a PIN, for authentication. The NRF has publicly come out in support of chip and PIN, stating that signature authentication does not effectively prevent thieves from impersonating the rightful owners of cards that are stolen or lost.

“Use of a PIN is absolutely essential to providing merchants and their customers with the full extent of protection available from chip-based cards,” said Matthew Shay, president and CEO of the NRF, in a statement. “The chip authenticates that a card isn’t a counterfeit but it’s the PIN that ensures the card is being used by its actual owner and not a thief scrawling an illegible signature. Chip-and-signature cards just don’t offer the level of protection needed to help stop criminal hackers from making money off payment card data.”

NRF has encouraged uniform use of PIN and chip for years, and urged Chase in recent meetings to make full use of the double layer of protection these cards offer, Shay added. “The networks and issuing banks should follow their lead and do the same,” he said.

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