Penney triples operating profits
May 18, 2004,
PLANO, Texas — Helped by sharply stronger same-store sales in its core department store business, and at the same time building margins, first-quarter operating profit almost tripled at J.C. Penney Co. Inc., shooting up 172.6 percent, to $229 million from $84 million a year ago.
Saddled with a $77 million one-time charged tied to the sale of its Eckerd drug store business, overall profits were off by a third, declining 32.8 percent, to $41 million from $61 million last year.
Lending further support to the bottom line, average gross margin widened by 80 basis points, or eight-tenths of a percentage point, to 40 percent from 39.2 percent. In another big assist, operating costs, when measured as a percentage of costs, were reduced 260 basis points, or two and six-tenths percentage points, to 34.3 percent from 37 percent.
"Sales and operating profits far exceeded our plan, reflecting the strengthening of our value position for the moderate consumer," said Allen Questrom, chairman and CEO.