JCPenney Cuts Costs
May 15, 2006,
With strong margins and cut interest costs, JCPenney drove first-quarter profits up 22.1% to $210 million from $172 million last year.
Average gross margin improved by 80 basis points, to 41.9% from 41.1% a year ago, gaining, the retailer said, “from better performance from private brands as well as continued improvement in seasonal transition and merchandise flow.”
At the same time, costs were cut by 40 basis points, to 33.2% of sales from 33.6% last year, reflecting “leverage of salary costs and efficiencies in the Direct business, which were partially offset by higher marketing costs, including the launch of the company's new branding campaign in March.”
In another big lift to the bottom line, interest costs were slashed by 30.6%, to $34 million from $49 million last year, generating a cash savings of $15 million. Interest costs came down as long-term debt was reduced by 10.0%, to $3.1 billion from $3.5 billion last year.
Related Content By Author
1200 Suppliers are Ready for You at Intertextile Shanghai
Home & Textiles Today eDaily
Most Viewed Articles
See the August 2017 issue of Home & Textiles Today. In this issue, we look at the Top 50 Retailing Giants Report, plus Manufacturing: Made in the USA gaining ground; International: Portugal ramping up exports; New products: NY Now home textiles introductions; Outlook: Commentary from H&TT's editors; and Planning: Trade show calendar.