J. C. Penney Company Inc total department store sales increased 1.4 percent for the five weeks ended July 7, 2007. Comparable department store sales decreased 1.5 percent, in-line with guidance for a low-single digit decline. Last year, comparable department store sales increased 4.3 percent in the June period.
The best performing merchandise categories for the month were children's apparel, women's apparel and family footwear, while categories such as furniture and fine jewelry continued to be soft. Geographically, the best performing areas were the southwest and northwest regions of the country.
Sales performance improved towards the end of the month, reflecting a strong initial response to the Company's Back-To-School merchandise assortments, as well as good clearance activity in seasonal merchandise categories.
Internet sales through www.jcp.com increased 10 percent for the month, on top of a 27 percent increase last year. Total Direct sales decreased 10.9 percent, in-line with guidance for sales to decline about 10 percent, and compares to a 6.0 percent increase last year. Sales in Direct continue to be impacted by softness in higher ticket home categories and the Spring/Summer Big Book.
Sales and Earnings Outlook: Management guidance for July continues to be for comparable department store sales to increase low-double digits to mid-teens. For Direct, management guidance is for sales to increase low-single digits.
As previously noted, this year's July period, which ends Aug. 4, 2007, benefits from an additional week of Back-to-School sales, due to the fiscal calendar shift resulting from last year's 53rd week. In last year's July period, comparable department store sales increased 4.9 percent and Direct sales were flat.
Management is reaffirming earnings guidance for the second quarter of $0.77 per share.
marketing@alchempro.com
