NEW YORK – J.C. Penney Co. Inc. (JCP), which has transformed itself from a dowdy, mid-priced retailer into a mainstream department store with fashionable designer merchandise, posted a fourfold jump in quarterly profit on Tuesday and raised its forecast for the year.
The company, whose shares rose 1 percent, reported net earnings of $172 million, or 63 cents per share, for the fiscal first quarter ended April 30, up from $41 million, or 13 cents per share, a year earlier.
The per-share earnings were 2 cents better than the average forecast among analysts polled by Reuters Estimates.
"The results were very strong, as expected," said Michael Koskuba, an analyst with Victory Newbridge Capital Management. "The company continues to do a good job with merchandise offerings, and it's important when the head of company wants to be the choice for middle America ... it's an area a lot of retailers miss or might ignore."
Plano, Texas-based Penney is wrapping up a successful five-year turnaround in which it sold its money-losing Eckerd drugstores (search) to focus on its department store, Internet and catalog businesses.
It recently launched a moderately priced, casual women's clothing line targeting middle-income women aged 35 to 54, and is also working on "nick(it)," a men's clothing line.
Penney ran a high-profile advertising campaign around its brands during the Academy Awards telecast in February.
At an analyst meeting last month, Chief Executive Mike Ullman unveiled a long-term plan for the company to make an "emotional connection" with shoppers and create an easier shopping environment and a better workplace.
Sales at department stores open at least a year, or same-store sales, rose 3 percent in the first quarter. Catalog and Internet sales rose 5.4 percent.
Overall sales rose 3.9 percent to $4.19 billion, in line with analysts' average forecast.
For the second quarter, Penney said same-store sales are expected to increase in the low single digits, with catalog and Internet sales rising in the low to mid-single digits.
It expects earnings from continuing operations of 25 cents to 30 cents per share for the second quarter.
For the full year, Penney raised its forecast for earnings from continuing operations to a range of $2.96 to $3.08 per share, up from prior guidance of $2.94 to $3.06.
The second-quarter and full-year forecasts assume charges of about 2 cents per share and 5 cents per share, respectively, related to debt retirements, and charges of 1 cent per share and 8 cents per share, respectively, for expensing of stock options.
Penney shares opened at $48.30, up 47 cents, on the New York Stock Exchange (search).
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