USA: Retail Giant JC Penney Doubles Q4 Profit
Retail giant JC Penney Co Inc on Thursday said it more than doubled its fourth quarter net profit to $202 million from $95m in 2001 on the back of better-than-expected holiday sales.
The Texas-based company, which also owns the Eckerd drugstore chain, said in press release sales for the period rose just 0.1 per cent to $9.55 billion as it was hit by a 20.7 per cent drop in catalogue sales.
Comparable department store sales rose 1.9 per cent thanks to strong holiday sales performance and solid apparel sales while Internet sales jumped 21.4 per cent to $138 million in the quarter and $381 million for the year.
The firm said it plans to restructure its catalogue operations for which it sees a $40m charge but annual savings of $30m.
Chairman and CEO, Allen Questrom, said: "Our focus is on strengthening our customer franchise through improved merchandise assortments and more powerful marketing programs that deliver superior value, and an enhanced store environment that improves the shopping experience.
"Over the past two years, both department stores and catalogue have increased operating profit margin by about 100 basis points per year, which is a significant accomplishment.
"The department store improvement reflects some of the early benefits of a centralised organisation and improved customer service. Catalogue has implemented major changes in its business model that have increased its contribution to operating profit."
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