• Q2 profit flat at $14m
  • Same-store sales rose 1.5%
  • Total sales slipped 0.8% 

Discounting and cost-cutting efforts have contributed to a flat second quarter profit at department store retailer JC Penney Company Inc.

The Plano, Texas based company said the performance of a number of exclusive and private brands including Liz Claiborne, Modern Bride, Arizona and St John's Bay added new customers and helped lift comparable store sales up by 1.5% in the three months to 30 July.

Total sales fell 0.8% in the period reflected the company's exit from its catalogue business, JC Penney said, while highlighting the strong results of women's apparel and accessories. Gross margin down 110 basis points to 38.3% of sales.

"The challenging economy continues to impact the moderate consumer," said Myron E (Mike) Ullman III, chairman and chief executive officer. "Nevertheless, we have made significant strides in implementing our merchandising growth initiatives, with sales gains across our apparel and accessories businesses both in stores and on jcp.com."

JC Penney now expects third quarter earnings per share in the range $0.15-0.20, including $0.05 in restructuring charges, on comparable store sales growth of 2% to 3%. Earlier this month it said further cost-cutting measures were planned, including a voluntary early retirement programme for an undisclosed number of workers.