Financial Reports: Penney, Hanover

Penney’s 1Q Profit Sinks

In a release, Plano, TX-based J.C. Penney Co. (NYSE: JCP) characterized its most recent quarter as “disappointing.” First-quarter net income tumbled 29%, to $61 million from $86 million last year. Sales, including those from the company’s Eckard drugstore chain, increased 3%, to $7.5 billion from $7.7 billion.

Combined department store and catalog revenue decreased 7%, to $3.7 billion from $4.0 billion last year. Breaking it down further, catalog sales fell 11%. Internet sales, however, increased more than 25%. Comparable department store sales decreased 5.0%.

Deferred Gain Boosts Hanover’s Bottom Line Multititle mailer Hanover Direct (Amex: HNV) reported net income of $200,000 for the quarter ended March 29, compared with a net loss of $1.8 million for the first quarter of last year. The profit is due to a $1.9 million deferred gain related to the company’s 2001 sale of its Improvements title.

Hanover, which mails the Domestications, Company Store, Company Kids, Silhouettes, International Male, Scandia Down, and Gump’s by Mail catalogs, reported a 6% drop in net revenue, to $102.5 million, from $109.5 million last year. The decrease is due to softness in demand and a 2% reduction in circulation for continuing businesses. Internet sales increased 33%, to $25.5 million from $19.2 million.