General merchandise cataloger/retailer J. C. Penney (NYSE: JCP) reported a net loss of $69.0 million for the quarter ended June 28, a dramatic reversal from its profit of $23.0 million a year ago. Total retail sales, including the catalogs and department stores, were flat at $7.2 billion. Second-quarter operating profit for the department stores and catalog businesses plummeted 85%, to $11 million from $74 million last year. Catalog sales decreased 23%, which Plano, TX-based Penney says is due to weak demand and the later mailing of the Fall/Winter big book.
Greenville, WI-based School Specialty (Nasdaq: SCHS) had cheerier news to report. The business-to-business cataloger of educational supplies saw fiscal first-quarter net income climb 45%, to $16.5 million from $11.4 million last year. Net revenue rose 20%, to $260.2 million from $217.1 million last year. The multititle mailer credits its strong numbers to reduced product costs and synergies resulting from the integration of the J. L. Hammett K-12 wholesale division, which it acquired in November 2000. But selling, general, and administrative (SGA) expenses, excluding depreciation and amortization, increased as a percentage of sales, to 25.4 % in fiscal 2002’s first quarter from 23.9 % a year ago, reflecting increased occupancy costs on acquired operations and higher commission rates on increased gross margin.
And thanks largely to the divestiture of its Improvements catalog and its Hanover, PA, warehouse, multititle mailer Hanover Direct (Amex: HNV) reported net earnings of $12.7 million for the three months ended June 30. Hanover was aided by a $22.8 million windfall on the sale of the Improvements business and a $1.5 million gain on the sale of its warehouse. For the comparable period of 2000, Hanover reported a net loss of $13.7 million.
As for second-quarter net sales, Weehawken, NJ-based Hanover reported a 7% decrease, to $133.5 million, due largely to circulation reductions.