Tight inventory controls and exclusive store label brands pushed J.C. Penney Co. into profitability in the second quarter. But the department store offered cut its profit outlook because of the uncertain economy.
The reduced outlook is a sign of jitters in the retail industry that consumers, still stinging from the recession and worried about jobs, aren't going to be increasing their spending any time soon.
J.C. Penney, based in Plano, Texas, said Friday that it earned $14 million, or 6 cents per share, in the three months ended July 31. That compares with a loss of $1 million, or break-even per share, in the same quarter last year.
The second-quarter 2010 results included a charge of about 5 cents per share related to a debt buyback completed in May.
Revenue was $3.94 billion, down 0.1 percent from a year ago. Revenue at stores open at least a year rose 0.9 percent compared with a year ago. The measure is a key indicator of a retailer's health because it includes sales at existing stores while excluding sales at newly opened locations.
Analysts surveyed by Thomson Reuters expected 5 cents per share on revenue of $4 billion.
Penney said that it expects revenue at stores open at least a year to be up 2 percent to 3 percent in the current quarter. Total sales should increase one percentage point less, which means anywhere from 1 to 2 percent, because Penney stopped publishing its Big Book catalogs.
For the current quarter, earnings per share should be in the range of 16 cents to 20 cents. Analysts had expected 24 cents per share.
For the year, Penney expects earnings per share to be between $1.40 per share and $1.50 per share. Analysts expect $1.54. In May, Penney had said it expected $1.64 for the full year.
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