First-quarter profit at retailer JC Penney Co Inc dropped by 29 per cent following what chief executive Allen Questrom described as "one of the most difficult retailing environments in recent memory."

The weak retail environment has been hampered by chilly winter weather, while TV coverage of the war in Iraq kept customers from heading out to malls.

Quarterly net sales fell 3 per cent to $7.49 billion. Sales at stores open for at least a year were down 4.9 per cent at department stores, compared with a 7.9 per cent rise a year ago.

Earnings for the quarter were $61 million, or 20 cents per share, down from $86 million, or 29 cents per share, a year earlier.

Questrom maintained the company's earnings outlook for the rest of the year and said JC Penney could still meet its previous full-year earnings guidance of $1.50 to $1.70 a share.

He added that May sales at department stores open at least one year are likely to increase by 2 to 3 per cent.