NEW YORK — J.C. Penney more than quadrupled its first-quarter profits thanks in part to a hefty boost from its Internet business, which drove up the retailer's top line by 3.9 percent.
Earnings raced ahead of analyst expectations by 2 cents.
"It was a good quarter. We've been very pleased with our performance so far this year. It was consistent with what we articulated in our analyst meeting on April 20," said Myron Ullman 3rd, chairman and chief executive officer of J.C. Penney, in a telephone interview.
For the three months ended April 30, net income was $172 million, or 63 cents a diluted share, compared with $41 million, or 13 cents, in the same year-ago quarter. Wall Street analysts' consensus estimates called for 61 cents a diluted share. The quarterly results also included $22 million in income primarily from the sale of real estate and pretax charges of $13 million related to the repurchase of debt in open-market transactions. Income from continuing operations rose to $172 million from $118 million. Since the year-ago quarter, the company divested itself of its Eckerd drugstore business.
Sales in the quarter rose to $4.2 billion from $4 billion, while comps gained 3 percent on top of a 9.5 percent increase in last year's first quarter. By channel, total department store sales rose 3.7 percent, while catalogue-Internet sales were up 5.4 percent on top of a 6.5 percent gain a year ago. Internet sales jumped 35 percent for the quarter.
The ceo said he was proud of the company's catalogue infrastructure, which supports jcpenney.com. Although the company does not break out sales by volume of its catalogue and Internet business, Ullman said the "Internet business within the next 12 months will have a sales revenue of $1 billion."
While the company also has a sizable amount of seamless crossover between its three channels, it is also planning on improving access for both the consumer and store associates.
The retailer has begun installing new point-of-sale technology in all of its stores. Two markets are now completed and a total of 40 percent of its store base will be outfitted with the new POS systems by October, with the balance being done during 2006. The new technology enables the retailer to connect its three shopping channels through in-store access to jcpenney.com, according to Ullman.
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)