J.C. Penney 1Q Earnings Up

Plano, TX, May 11, 2006–J.C. Penney Co., reported a 22% jump in first-quarter earnings, helped by tighter spending controls and improved gross margins.

The company’s earnings rose to $210 million, or $0.89 a share, from $172 million, or $0.63 a share. On a continuing operations basis, it earned $0.90 a share compared to $0.62 a share a year earlier.

Sales for the quarter rose 2.5% to $4.22 billion. Same-store sales were up 1.3%.

Analysts reporting to Thomson First Call were looking for an average per-share profit of $0.88 on sales of $4.22 billion.

“While economic indicators are generally positive, we know that our customers – the moderate consumer – are faced with high energy prices and increasing interest rates,” chief executive Mike Ullman said in a statement. “This makes it even more important that we deliver the style, quality, and shopping experience they want.”

J.C. Penney recently wrapped up a five-year turnaround plan, which included improving sourcing, stocking more fashionable merchandise and private label brands, and selling its Eckerd drug store business.

For the second quarter, Penney expects a same-store sales increase in the low single digits and earnings of about $0.60 share. For the year, the company targeted earnings from continuing operations in a range of $4.24 to $4.34 a share.