J. C. Penney Company Inc reported record third quarter earnings. Operating profit increased 24.1 percent to $504 million from $406 million last year and improved 140 basis points to 10.5 percent of sales.
Operating profit improvement was driven by strong sales performance, coupled with improved gross margin and leverage of selling, general and administrative expenses.
Third quarter 2006 earnings per share from continuing operations increased 34 percent to $1.26 from $0.94 last year.
Operating Results Third quarter operating profit was $504 million, a 24.1 percent increase from last year's $406 million.
Total department store sales increased 7.0 percent and comparable department store sales increased 5.2 percent.
Sales were well ahead of the Company's initial guidance and increased across all merchandise divisions and regions of the country.
The strongest merchandise results were in children's, men's and family shoes, and the best regional performances were in the southeast and the northeast.
During the quarter, Direct sales increased 5.3 percent, and company sales increased approximately 27 percent.
Gross margin improved by 80 basis points to 42.6 percent of sales, reflecting continued benefits from private brand performance and ongoing improvement in flow and management of merchandise inventories.
Financial Condition and Other Items The Company continues to maintain a strong financial condition. As of October 28, 2006, the Company had cash and short-term investments of $2 billion and long-term debt, including current maturities, of $3.5 billion.
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