J.C. Penney Improves Profitability
Lower expenses helped boost the fourth-quarter earnings of Plano, TX-based J.C. Penney Corp. (NYSE:JCP) above expectations. The catalog/retailer reported net income of $333 million for the quarter ended Jan. 29, compared with a $1.1 billion loss a year ago. Most of the loss was attributed to the Eckerd Drugstore business, which Penney sold.
Fourth-quarter department stores and catalog/Internet sales fell 0.4%, to $6.07 billion, from $6.10 billion last year. The fourth-quarter of fiscal 2004 was a week shorter than that of 2003, however. For a comparable 13-week period, catalog/Internet sales increased 4% over last year. Internet sales increased 33%, and same-store sales rose 3%. Penney says its been able to drive sales through merchandise improvements, offsetting some of the negative impact on its lower income customers hurt by higher gas prices.
For the year, department store and direct sales were $18.42 billion, up nearly 4% from 2003’s $17.79 billion. And Penney reported net income for the year of $524 million, a turnaround from a net loss of $928 million the previous year.
Delivery Unit Strong at Staples
Framingham, MA-based catalog/retailer Staples (Nasdaq: SPLS) rode increased sales to strong profits for the fiscal year and fourth quarter ended Jan. 29.
For fiscal 2004, sales were $14.45 billion, an 11% increase from 2003. Net income increased 41%, to $708.4 million, on a GAAP basis from 2003. The company had incurred a $62 million noncash adjustment net of taxes in the first quarter of 2003. On a pro forma basis, net income increased 28%.
Sales of its North American Delivery Business—which includes the Staples and Quill catalog and online businesses as well as the Staples contract delivery business—increased 14%, to $4.20 billion from $3.70 billion the previous year. North American comparable store sales increased 4%.
For the fourth quarter, total company sales grew 13%, to $4.08 billion from $3.61 billion for fiscal 2003. Net income increased 19%, to $251.3 million.
Fourth-quarter North American Delivery sales increased 19%, to $1.12 billion. Same store sales rose 4% compared with last year.