In announcing stronger earnings and sales, JCPenney says it is amping up its expense-reduction plans, and will deliver an additional $50 million in savings this year -- some based on more efficient marketing spending.
The Plano, Tex.-based retailer says its net income for the first quarter rose 6.7% to $64 million -- up from $60 million in the first period of last year, beating earlier estimates. And while overall sales squeaked up just 0.4% to $3.94 billion, up from $3.93 billion in the year-ago period due to its exit from the catalog business, same-store sales generated a 3.8% gain.
The company attributed those results to sales of such private-label brands as Liz Claiborne, Worthington and St. John's Bay, as well as ongoing growth of its store-within-a-store concepts, such as Sephora inside jcpenney (now in 254 locations), MNG by Mango (now in 292 stores), and Call It Spring (in 100 spots.) Women's and children's apparel were its best sellers, with the Southwest turning in the strongest regional performance.
Penney says it is stepping up its cost-cutting initiatives, and streamlining operations across stores, its supply chain and home office, as well as in its marketing budget.
For the next quarter, it expects its comparable-store sales to climb between 3% and 4%.
Separately, Lowe's surprised observers with an unexpected drop in sales. The Mooresville, N.C.-based home improvement chain says net income fell 5.7% to $461 million, while sales slipped 1.6% to $12.2 billion from $12.4 billion in the first quarter of last year. Comparable-store sales for the period dropped 3.3%. The company attributed the sales dip to bad weather and a tough economic climate. The chain also faced tougher comparisons, due to last year's government stimulus programs in appliances.
In the second quarter, it predicts a total sales gain of 4%, with comparable-store sales expected to climb 2%.