Thursday, Department store chain J.C. Penney Co. Inc. (JCP) said its March same-store sales declined 7.2 %, but were better than its expectations. The company also narrowed its first-quarter loss estimate.
Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.
The Plano, Texas-based company's comparable-store sales for the five-week period ended April 4, 2009 dropped 7.2%, compared to a 12.3% downturn witnessed in the previous year. Earlier, the company had expected a low-double digit to mid-teen decrease in its comparable store sales.
Total company sales in March descended 5.4% to $1.46 billion from $1.54 billion reported in the same period of the previous year.
J. C. Penney primarily offers family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings. It also owns and operates four Internet/catalog fulfillment centers and five regional warehouses.
The department-store operator has ramped up its spring merchandise coupled with enhanced style and affordable prices to cope with the current grappling consumer environment. Further, the company noted that it received positive responses across its women's assortments and increasingly in home business.
Overall, the company said home was the best performing division in March, while fine jewelry suffered the weakest sales results. O n a geographic basis, the central region remained as the best performing area of the country, while the southeast region had the weakest results.
Among other players in the field, Kohl's Corp. (KSS) witnessed a 4.3% downturn in the March comparable store sales, but said Sales results for March exceeded our expectations. Meanwhile, total sales for the month rose 0.5% to $1.433 billion from $1.426 billion in the year-earlier period.
Macy's Inc. (M) reported a 9.2% decline in same-store sales for the month of March, and 9.8% drop in total sales that amounted to $1.931 billion, versus $2.142 billion reported last year.
For the nine-weeks ended April 4, 2009, the company reported a decline of 7.9%, compared to a 9.9% downturn in the year-ago period. Total sales for the period dropped to $2.62 billion from the previous year's sales of $2.79 billion.
Looking forward for the month of April, J. C. Penney projects comparable department store sales to drop 9% - 12%. April sales results this year would reflect the shift of Easter into the April reporting period and include one less selling day compared to last year. In the year-ago period, the company reported a 1.7% decline in comparable store sales.
Comparable store sales for the first quarter are currently projected to decline 8% - 10% versus the previously issued forecast for a decrease of 12% - 15%.
The company now expects first-quarter loss $0.05 - $0.10 per share, compared with its previous estimate for a loss of $0.20 - $0.30 per share. Both the guidance included a negative impact of about $0.23 per share for non-cash primary pension plan expense. On average, 13 analysts polled by Thomson Reuters expect the company to report a loss of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.
In a separate communiqué, J. C. Penney announced the launch of three new brands for young men, RS By Sheckler, Rusty surf apparel and Third Rail a Zoo York Production. These new surf and skate-inspired brands will be available in JCPenney stores and jcp.com starting July 11.
J. C. Penney shares, which have been trading between $13.71 and $46.56 in the past 52 weeks, is currently trading at $24.48, up $1.88 cents or 8.32%.
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