Both J.C. Penney Co. Inc. and Abercrombie & Fitch Co. on Friday blamed the difficult retail environment for sizable third-quarter profit declines.
For the three months ended Nov. 1, profits at J.C. Penney fell 52.5 percent to $124 million, or 55 cents a diluted share, from $261 million, or $1.17 a share, last year. Sales in the quarter fell 8.7 percent to $4.31 billion from $4.72 billion a year ago.
"We believe that J.C. Penney continues to be well positioned in a very challenging retail environment," said Myron E. "Mike" Ullman 3rd, chairman and chief executive officer of the Plano, Tex.-based department store firm. "With the expectation that challenging conditions will persist into 2009, we will be planning our business accordingly."
For the first nine months of fiscal 2008, J.C. Penney profits fell 47 percent to $361 million, or $1.61 a share, from $681 million, or $2.98 a share, last year. Sales in the period dropped 5.5 percent to $12.72 billion from $13.47 billion a year ago.
Abercrombie & Fitch also posted a more than 40 percent dip in third-quarter profits.
For the three months ended Nov. 1, profits at the New Albany, Ohio-based firm fell 45.7 percent to 63.9 million, or 72 cents a diluted share, from $117.6 million, or $1.29 a share, last year. Sales in the quarter fell 8 percent to $896.3 million from $973.9 million last year.
"Our third quarter financial results reflect a pull back in consumer spending and a difficult economic environment that is having an effect on our retailers," said chairman and ceo Mike Jeffries.
For the first three quarters, the firm posted a 21.3 percent fall in profits to $203.8 million, or $2.27 a share, from $258.9 million, or $2.82 a share, last year. Sales remained mostly flat, rising just 0.9 percent to $2.54 billion.
The company cut its full year guidance to $3.27 to $3.32 a share from earlier estimates of $4.95 to $5.00 a share.
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