follow us

JCPenney cites home textiles in strong 2005 performance

Plano, Texas – Bedding and window were among the categories turning in a “noteworthy” performance during the fourth quarter, JCPenney executives said during an analysts call earlier today. Fourth-quarter operating profit grew to $655 million, up 14.5% over the same period a year ago. Comp store sales were up 2.6% while overall store sales grew 4.2%.

The coming four years will be focused on growth. This year, Penney will open 26 stores – all but six of them in off-the-mall formats, nearly doubling the off-the-mall store count by year-end to 42 units. Sales at off-the-mall properties are running $250 per sq. ft., according to Mike Ullman, chairman and ceo.

The impact from the upcoming sales at May Co. stores marked for elimination should cause “a short-term blip” as the market floods with clearance merchandise, said Ken Hicks, president and coo. Beyond that, Penney has a good opportunity to capture May’s moderate customer, he added.

Penney expects to pick up only a few of the closed May stores, said Ullman. He noted the company already operates stores in 70% of the markets where Federated is shuttering former May doors.

JCPenney had a very solid year in 2005: reporting on its financial and strategic results, the company said operating profit was up 22.5% to $1.58 billion, as gross margin gained by 5.5% to $7.4 billion. SGA edged up just 1.7% to $5.8 billion, while sales were up 3.8% to $18.8 billion. Comp store sales were up 2.9%, compared against a robust previous year comp gain of 4.9%.

The retailer opened 18 new stores, its biggest brick-and-mortar expansion in eight years. Along the way, annual online sales passed the $1 billion mark.

JCPenney expects to see 2006 sales climb in the “low- to mid-single digit” range; the comp store projection is low-single digits. The company will continue to emphasize its exclusive brands and licenses in both merchandising and marketing efforts.

Featured Video

Other Home Furnishings Sites

Casual Living
Furniture Today
Gifts and Decorative Accessories
Home Accents Today
Kids Today
HFN - Home Furnishings News